Families help MotorCycle Holdings keep up the revs

MotorCycle Holdings’ performance through the pandemic indicates families are jumping onto motorbikes.

MotorCycle Holdings chief executuve David Ahmet: ‘People are buying bikes for something safe to do outdoors, where they can get away from people when there are no other options such as travelling overseas.’ Picture: Lyndon Mechielsen

Motorbike riding is typically thought of as a solitary activity, or one performed by a group of leather-clad, middle-aged men — but one company’s annual report shows that during the COVID-19 pandemic, it is increasingly being adopted as a family activity.

Motorbike dealer conglomerate MotorCycle Holdings has delivered its highest profit and paid a special dividend after sales shot up during the deepest, darkest months of lockdown.

Sales of new bikes across Australia increased by 11 per cent over the year, and 16 per cent across MotorCycle’s more than 30 dealerships.

But the single best-selling bike of the year wasn’t a Honda or a Harley; it was the Kawasaki KLX110, an off-road mini bike for children that retails for between $2500 and $3000.

CEO and managing director David Ahmet told The Australian sales for children’s mini-bikes increased by 60 per cent over the year, driven by parents wanting to engage in a COVID-safe outdoor activity with the family.

“We saw massive sales growth in off-road motorcycles, particularly leisure dirtbikes,” Mr Ahmet said.

“People are buying bikes for something safe to do outdoors, where they can get away from people when there are no other options such as travelling overseas — people are sick of being cooped up indoors.”

The $111m company, which also owns the Cassons motorcycle parts and accessories brand, recorded a net profit after tax of $15.2m — an 81 per cent increase on the $8.4m recorded in 2019.

The result came on the back of a 10 per cent increase in revenue to $363.7m and the company announced a special dividend of 5c per share, the first payout to shareholders in 18 months.

The bumper profit was helped by a strong growth in the sale of road bikes to people who were looking for a COVID-safe alternative to public transport, Mr Ahmet said.

“When you think about it, when you’re on a bike you are covered in a helmet and gloves — personal protective equipment comes built-in,” he said.

Also assisting were strong four-wheel all-terrain vehicle sales: in the first half of the year, sales increased by 51 per cent due to good rainfall and the government’s expanded instant asset write-off scheme encouraging farmers to invest in equipment.

The company also managed to reduce its cost base, motivated by an initial sales drop at the start of the pandemic. “We were able to expand the network, reduce costs extensively across the group, and significantly grow our underlying EBITDA and profit after tax for the year,” Mr Ahmet said.

“Importantly, we were able to improve our net debt position considerably and finished the year with $39.5m in cash, up from $9.2m the previous year.”

The company also received $5.9m in JobKeeper wage subsidy payments.

No official guidance was provided, but Mr Ahmet said he was confident strong sales would continue through the coming year.

MotorCycle shares closed up 8 per cent on Friday, at $1.95.