MotorCycle Holdings more than tripled first half profits won’t be giving back JobKeeper

MotorCycle Holdings’ profits are zooming along like a well-oiled machine, but the company says it did it tough last year and isn’t giving JobKeeper payments back.

Motorcycle Holdings chief executive David Ahmet says the company is performing strongly.

MotorCycle Holdings has more than tripled its first half profits on strong sales, but is not of a mind to give back the $5.8m in JobKeeper payments it was paid last year.

The Slacks Creek, Queensland, company will pay $6.1m in dividends, but chief executive David Ahmet said the decision to pay the dividend was made on the basis of the underlying numbers.

Mr Ahmet, who personally owns 18.3 per cent of the company and therefore stands to be paid $1.1m in dividends, said the company was fighting for its survival last year and there were real concerns for a three-to-four month period that it might not survive.

He said the government offered the support, and the company took it “in good faith” as the company suffered with dealerships across the nation being closed down.

“We haven’t paid any dividends from JobKeeper money, we did take that into account, we specifically didn’t base our dividends on any JobKeeper assistance,’’ Mr Ahmet said.

“We haven’t decided to return the money at this stage, we did have Victoria shut for three months, who knows where we’re going to end up?

“We’ve had dealerships closed during that time, before and after the last half.’’

Mr Ahmet said there was a company charter to pay out a certain amount of profits as dividends and that calculation was made excluding the JobKeeper amount. He said he didn’t believe he or other shareholder directors had a conflict of interest in making a decision to pay a dividend.

On the operational front, Mr Ahmet said sales had been strong, but inventories were down due to supply constraints around international shipping.

While there was strong interest in motorcycle sales, the supply issues were of some concern, Mr Ahmet said.

The company’s revenues for the first half to end of December came in at $218.4m, excluding JobKeeper, up 23 per cent, while net profit more than tripled from $4.8m to $17.2m.

The company paid its debt of $47.6m from the previous half down to zero and has $7.4m in cash on hand.

New motorcycle sales jumped 30 per cent to 6770 units, “as an outcome of introducing new products into existing stores and the dealership network expansion compared with the national market increase in new motorcycle sales of approximately 20 per cent’’.

Used motorcycle sales fell 6 per cent to 4697 units, however sales value increased 5 per cent and better margins generated a gross profit increase of 30 per cent over the previous corresponding period.

Mr Ahmet said in a statement to the ASX the company was in a strong position.

“The improved trading conditions also enabled us to retire all bank debt to be in a no debt position as at December 2020 with $7m at bank providing us with the ability to make strategic acquisitions should opportunities present themselves.”

MotorCycle Holdings is about 80 per cent owned by eight major shareholders.

The stock closed 6.4 per cent up at $2.50.