Car group AP Eagers (ASX:APE) estimates a record June-half profit before tax of $27.9 million, in what it hails as a validation of its acquisition strategy.
Unaudited results show that pre-tax profit grew 22% year-on-year, on the back of earnings per share accretive results from recent acquisitions.
These include Adtrans, which AP Eagers acquired last year; Elben Motors, purchased through the Adtrans business in March for $7 million; and Caloundra City Autos, acquired for around $10.5 million in early 2010.
Like-for-like earnings also increased, and asset sales contributed around $1.7 million to total pre-tax profit.
But earnings were held back by vehicle shortages arising from the impact of the Japanese earthquake and tsunami on supply-chain inventories, and AP Eagers CEO Martin Ward commented on what had been “a tough retail environment.”
AP Eagers predicts that a second-half new vehicle supply recovery will lift the company's momentum in the second half.
APE shares fell 7.62% in Tuesday's trading to $10.300.