FY2022 Market update

NZ Automotive Investments Limited, 17 Levene Pl, Mt Wellington, Auckland, 1060
+64 (9) 666 0158 | info@nzautomotiveinvestments.co.nz | nzautomotiveinvestments.co.nz
1 April 2022
Company Announcement
NZX:NZA
NZ AUTOMOTIVE INVESTMENTS LIMITED – STRENGTHENING NZD TO IMPACT FY 2022
RESULTS
New Zealand based integrated used automotive group NZ Automotive Investments Limited (NZAI / the
Company) (NZX:NZA) advises that due to external economic factors including the war in Ukraine, weaker
economic sentiment in Japan, and further bond buying by the Bank of Japan, the New Zealand Dollar
has strengthened against the Japanese Yen in recent weeks. This confluence of factors has created an
unexpected and sudden strengthening of the New Zealand Dollar against the Japanese Yen across the
Company’s FY2022 balance date.
This movement has affected the Company’s foreign exchange hedge position with respect to committed
inventory purchasing in the financial year ended 31 March 2022, creating a mark to market loss of $0.7m.
The foreign exchange impact relates to inventories that will be delivered in FY23 and does not
economically relate to the FY22 year. Nevertheless, the Company’s accounting policies will require it to
recognise the impact in its FY 2022 financial statements.
As a result, the Company now expects underlying net profit after tax for the year ended 31 March 2022
to be in the range of $1.7m to $1.8m, down from the guidance of $2.3m - $2.7m announced in January
2022. Actual net profit after tax, which includes a one-off gain from the rearrangement of leases of $0.9m,
is expected to be in the range of $2.6m to $2.7m, down from the guidance of $3.2m to $3.6m previously
announced. In the absence of the accounting impact of these foreign exchange movements the Company
had been expecting to deliver a result towards the lower end of the guidance range.
The Company remains in compliance with all banking covenants and is in a solid financial position with
cash balances of $3.8m and net debt of $8.0m (including the trade finance facility), as at 31 March 2022.
Ends
For further information please contact:
Shareholder enquiries
David Page
CEO
+64 21 980 795
David.p
@nzautomotiveinvestments.co.nz
Haydn Marks
CFO
+64 21 2211 040
Haydn.m@nzautomotiveinvestments.co.nz
About NZ Automotive Investments Limited (NZAI)
NZAI is an integrated used automotive group operating throughout New Zealand via two subsidiaries: Automotive Retail and
Vehicle Finance. NZAI’s mission is to deliver quality cars and financing solutions at the most affordable prices to the average New
Zealander. Operating under the “2 Cheap Cars” brand, its Automotive Retail company is one of the largest used vehicle sellers in
New Zealand with 12 dealerships across the country. Its Vehicle Finance company operates under the “NZ Motor Finance” brand.
It was established in 2019 to diversify earnings and provide a further growth opportunity for NZAI. It originates loans entirely from
cross-selling to Automotive Retail customers, which allows NZ Motor Finance to grow its finance book with minimal acquisition
and administrative costs. www.nzautomotiveinvestments.co.nz