2022 Annual Report
PO Box 6159
Wellington
New Zealand 6141
DX SP21009
Level 6
57 Courtenay Place
Wellington 6011
Telephone: 04 384-9734
Email: cmc@colmotor.co.nz
Website: www.colmotor.co.nz
104
th
ANNUAL REPORT 2022
The Directors of The Colonial Motor Company Limited present its 104
th
Annual Report covering the year to 30 June 2022.
The report is being mailed to all shareholders.
Additional copies are available on request from the Company at PO
Box 6159 Wellington 6141 or telephone +64 (0)4 384 9734 or e-mail
to cmc@colmotor.co.nz.
The report can also be downloaded from the Company’s website
www.colmotor.co.nz .
J G Tuohy
Company Secretary
The Colonial Motor Company Limited
28 September 2022
---
103
rd
Annual Report 2021
2022
104
th
Annual Report
BOARD OF DIRECTORS
Ashley J Waugh, Chair
Graeme D Gibbons
Matthew J Newman
Stuart B Gibbons
John W M Journee
Gillian D Watson
John O Hutchinson
J P (Jim) Gibbons
Retires at Annual Meeting
Appointed 1 September 2022
Retired 5 November 2021
CHIEF EXECUTIVE
GROUP MANAGER People, Process & Technology
GROUP MANAGER Finance
GROUP MANAGER Strategic Development
COMPANY SECRETARY
Alexander P Gibbons
June E Gibbons
Paul Stephenson
Stuart B Gibbons
Jack G Tuohy
Appointed Chief Executive
effective 1 October 2021
(Graeme D Gibbons
Retired 30 September 2021)
AUDITOR
Grant Thornton New Zealand Audit Limited
(Partner Ryan Campbell)
BANKERS
ANZ Bank New Zealand Limited
Bank of New Zealand
Westpac New Zealand Limited
SHARE REGISTRY
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, North Shore
Private Bag 92119
Auckland 1142
Website: www.computershare.co.nz/investorcentre
REGISTERED OFFICE AND
ADDRESS FOR SERVICE
Level 6
57 Courtenay Place
PO Box 6159
Wellington 6141
New Zealand
Telephone (04) 384-9734
E-mail address cmc@colmotor.co.nz
Website www.colmotor.co.nz
PROSPECTIVE DATES FOR 2023
Interim Half Year Report Late February
Interim Dividend 27 March
Preliminary Full Year Report Late August
Annual Report Late September
Final Dividend 2 October
Annual Meeting 10 November
Shareholder enquiries can be addressed to the Registered Office or directly to the Share Registry.
The Company is able to send shareholders e-mail notifications of the announcement of its half year (in February)
and full-year results (in August). To register for this service please send an e-mail to cmc@colmotor.co.nz from the
e-mail account you wish to receive the notifications with “Preliminary Results” in the subject line.
1
Notice of 104
th
Annual Meeting
Notice is hereby given that the 2022 annual meeting of shareholders of
The Colonial Motor Company Limited
will be held at
The Harbourside Function Venue, 4 Taranaki Street, Wellington
on Friday, 11 November 2022 commencing at 12:00 midday
BUSINESS
1. Chair’s introduction
2. Address from the Chair
3. Report from the Group Chief Executive
4. Shareholder discussion
5. Resolutions
To consider and if thought fit, to pass the following resolutions
(see explanatory notes on the next page)
1. To re-elect John William Michael Journee as a director of the Company
2. To elect John Ormond Hutchinson as a director of the Company
3. To record the on-going appointment of Grant Thornton as auditor and to authorise the
directors to fix the auditor’s remuneration.
6. General business
LOCATION
Cable Room
Harbourside
Function Centre
Museum of
New Zealand
Te Papa
Tongarewa
Circa
Michael
Fowler
Centre
Lagoon
2
Explanatory Notes – relating to the annual meeting
Voting
All voting at annual meetings must be conducted by poll. Procedures for voting, the appointment of proxies and
representatives, vote counting and the announcement of the results are applied and disclosed in detail.
Proxies and representatives
If you choose not to attend the meeting, a form is enclosed for you to complete to appoint a proxy or corporate
representative to vote on your behalf. Detailed guidance is provided on the form on how to complete it. Further copies
of the form may be obtained from the Company or downloaded from our website.
Resolutions
Each of the resolutions will be considered as a separate ordinary resolution. To be passed, an ordinary resolution
requires a simple majority of votes of shareholders entitled to vote and voting. Each share in the Company carries one
vote.
The Board supports passing all of the resolutions.
Re-election and election of directors
The Listing Rules require that a director must not hold office (without re-election by shareholders) past the third annual
meeting that follows the director’s last election or 3 years, whichever is longer.
A director appointed by the Board must not hold office (without election by shareholders) past the annual meeting
following the director’s appointment.
Resolution 1
John William Michael Journee was elected as a director at the 2019 annual meeting. He is eligible and offers himself for
re-election.
John has held various senior executive positions in the retail industry in New Zealand and Australia including with Noel
Leeming and The Warehouse. He is currently a director of The Warehouse Group Limited, Farmlands Co-operative
Society Limited, West Auckland Trust Services Limited and Themarket.com Limited. He is also a member of the Quantiful
Limited Advisory Board.
Resolution 2
John Ormond Hutchinson was appointed by the Board as a director with effect from 1 September 2022. He is eligible
and offers himself for election.
John is currently the Chief Executive / Dealer Principal of Team Hutchinson Ford in Christchurch. The dealership also
incorporates the Grey Ford operation in Greymouth and two Bridgestone Tyre Centres in Christchurch.
Auditor re-appointment and remuneration
Resolution 3
Under section 200 of the Companies Act 1993, the auditor is automatically re-appointed each year unless ineligible or
replaced.
The fee paid to the auditor is disclosed in the annual report each year (refer page 17).
3
Facts at a glance
2018 2019 2020 2021 2022
Revenue ($000) 904,034 909,002 754,922 901,173 1,002,848
Trading profit after tax (excluding non-trading Items) ($000) 24,670 21,989 17,349
27,924
33,345
Profit after tax attributable to shareholders ($000) 24,909 21,830 21,828
24,833
33,183
Return on average shareholders’ funds
- trading profit after tax 13.1% 10.9% 8.0%
11.4%
11.8%
- profit attributable to shareholders 13.3% 10.8% 10.0%
10.1%
11.7%
Trading margin 2.7% 2.4% 2.3%
3.1%
3.3%
Earnings per share - trading profit after tax 75.5c 67.3c 53.1c
85.4c
102.0c
- profit attributable to shareholders 76.2c 66.8c 66.8c
76.0c
101.5c
Dividend per share 50.0c 45.0c 32.0c
55.0c
62.0c
Total dividends for the year ($000) 16,347 14,713 10,462 17,982 20,271
Shares on issue at reporting date (000) 32,695 32,695 32,695 32,695 32,695
Current ratio 1.4 1.4 1.5 1.4 1.6
Shareholders' equity as a percentage of total assets 48.3% 51.6% 59.2% 58.6% 66.2%
Net tangible asset backing per share $5.60 $6.02 $6.60 $7.60 $8.78
(after final dividend is paid)
-
200
400
600
800
1,000
1,200
20182019202020212022
$ million
Revenue
-
5
10
15
20
25
30
35
20182019202020212022
$ million
Trading Profit after Tax
11.2%
12.0%
9.3%
8.0%
9.0%
8.5%
8.7%
4.7%
9.5%
8.3%
25.4%
31.6%
10.6%
7.8%
21.0%
6.7%
10.0%
-22.2%
34.3%
3.4%
-25%
-15%
-5%
5%
15%
25%
35%
45%
2013201420152016201720182019202020212022
Percentage return on share price
at start of each year
Shareholder Returns
(Share price plus dividend)
refer to table on page 51
Gross dividend yield
Movement in share price
Average gross return over 10
years16.9% p.a.
FinancialYear
4
Directors’ report
Your Directors have pleasure in presenting the 104
th
annual report and audited consolidated financial statements of The Colonial
Motor Company Limited (CMC or Company) and its subsidiaries (Group) for the year ended 30 June 2022.
Revenue and profit
Revenue for the year was $1,002.8m. This is an 11% increase on the previous year’s $901.2m reflecting continuing strong
demand for new and used vehicles and the incentive for customers to purchase before the introduction of the clean car tax on 1
April. This year’s revenue compares to $754.9m in 2020 and $909.0m in 2019.
The trading profit after tax for the year was $33.3m, up 19% on last year’s $27.9m. Trading profit after tax is not specified under
Generally Accepted Accounting Practice but is a consistent measure of the underlying trading profitability of the Group before
valuation changes of assets and deferred tax movements. It is also the reference point used by the Board when considering
dividends.
Profit for the year attributable to shareholders was $33.2m, compared to $24.8m in 2021.
Statement of financial position
Total assets increased to $458.2m at year end (2021 : $447.7m). Inventory fell by $26.4m reflecting difficulties with the supply
chain for vehicles following Covid and issues with semi-conductors. Additions to Land & Buildings of $20 .8m focused on the
purchase of new property in Auckland and Rotorua and the refurbishment of existing sites in Christchurch and Timaru. The
annual independent revaluation of the Group’s property portfolio brought about an increase in the revaluation reserve of $24.0m
(2021 : $25.2m). At the reporting date, shareholders’ equity was $303.3m (2021: $262.4m).
Dividends
Dividends paid in respect of this financial year will total 62.0 cents per share (2021: 55.0 cents). An interim dividend of 15.0
cents was paid on 28 March 2022 and a final dividend of 47.0 cents will be paid on 3 October 2022. The dividend will carry the
maximum level of imputation credits. The value of the distributions for this financial year will be $20.3m (2021: $17.9m),
representing 61% (2021 : 64%) of the trading profit after tax.
Total shareholder returns over the past ten years are shown in the graph on page 3.
Directors
The independent Directors at 30 June 2022 and the date of this report were A J Waugh and J W M Journee.
The L isting Rules of the New Zealand Stock Exchange specify that a director must not hold office (without re-election) past the
third annual meeting following the director’s appointment or three years, whichever is longer. On that basis, the director to retire
this year is J W M Journee. He is eligible and is seeking re-election at the forthcoming annual meeting.
John Hutchinson was appointed as a director with effect from 1 September 2022 and as required by the Listing Rules, he will be
seeking election at the a nnual meeting.
Matthew Newman will be retiring from the Board at the annual meeting having been a director since November 2013.
Director and company disclosures
Information required to be disclosed by the Directors and by the Company, to comply with the Companies Act 1993 and the
Listing Rules, is provided on pages 47 to 52. A separate Governance Statement is provided on pages 44 to 46 and a report on
the CMC Group strategic direction is on page 5.
14 September 2022
For the Directors
A J Waugh J W M Journee
Chair of the Board Chair of the Audit & Compliance Committee
5
CMC Group strategic direction
Management of capital resources
The Group has a strong balance sheet, with significant shareholder equity and very few long term financial commitments.
The major assets on the balance sheet are property and inventory, with property funded by retained earnings and
inventory funded by short term borrowing (bank borrowing, at call deposits and bailment). There is minimal goodwill.
The Group owns most of its key operational properties. The Group does not have investment properties as such, as all
of the properties are occupied or intended to be occupied by our dealerships. Ownership brings greater flexibility when
tailoring facilities to the Group’s particular requirements. It provides security of tenure whilst conversely enabling the
Group to sell and relocate as needs arise without the constraints of a long term lease.
The Group seeks to pay regular dividends calculated at 60 - 70% of trading profit. The dividends have the maximum
imputation credits available to New Zealand shareholders. The remaining profit is reinvested in the business, either for
controlled growth or maintaining and reinvesting in the quality of the existing assets.
This investment or reinvestment may be in the form of establishing or acquiring a dealership business, or in developing
a new property for use by a dealership, or refurbishing and upgrading an existing facility.
By adopting an approach to capital management of:
- paying 60 - 70% of trading profit as dividend
- not overly gearing up the balance sheet by taking on significant long term debt
- not going to the shareholders for more capital
the Group is able to provide controlled growth for shareholders without shareholder dilution.
Operational Model
CMC is the parent company for a group of motor vehicle dealerships – the success of these dealerships is CMC’s
lifeblood.
The CEOs (Dealer Principals) of our subsidiary companies operate within a financial and operational mandate but have
wide discretion and local autonomy. Their role involves balancing the often conflicting demands of the franchisor,
customers, employees and profitability.
We consider each dealership business individually including its needs for reinvestment and growth opportunities.
The Group balances the need to change and adapt with an awareness that it has specific areas of expertise. The
operational expertise revolves around the franchise business model, as a franchisee in a local market area or on a
national basis. In this model the franchisor supplies the product and brand positioning, with the franchisee concentrating
on promoting the brand and selling the product and service to the customer. The model brings its own unique challenges
and opportunities.
As a response to and to enable success in a highly competitive and fragmented market place, particularly in metropolitan
areas, we have been moving to a ‘hub and spoke’ model. Here the main dealership facility, which encompasses all the
business’s array of activities – new and used vehicle sales, parts and service – is complemented by “service only” facilities
in customer convenient locations. This model is operational in South Auckland and Greater Wellington.
To be successful and grow a dealership, or establish a new one, we need to have management strength and depth and
also a franchise opportunity that fits. Where we have an existing property, or can provide a property solution, this
enhances our ability to take action. Ideally, we will grow by representing a new franchise partner in a number of locations
rather than as a one off.
With Southpac Trucks we have expanded over time by increasing the market position of the Kenworth and DAF brands
in an expanding heavy truck industry. This brings growing parts and service opportunities for that business and its
network of independent parts and service dealers.
The location of our dealerships spans all of New Zealand and range from small to large and from single to multiple
brands. The major brands with significant representation are light vehicles - Ford and Mazda; heavy trucks - Kenworth
and DAF; tractors - New Holland, Case IH and Kubota. We also take pride in our relationship with a range of other
brands we partner with across our dealership network.
6
Chief Executive’s report
Our people are our strength
It was an extraordinary and challenging year but also a record one for the Group. The ability to navigate what seemed
like uncertainty on every front is testament to our dedicated and loyal staff across the CMC family. Being able to
consistently deliver for customers, shareholders and franchise partners is only achieved through a true team effort and
the credit belongs to all of our people across New Zealand.
A special thank you to Matthew Newman for his 36 year career with the Group. Matthew stepped down as Chief Executive
of South Auckland Motors and Southern Autos at the 30
th
of June this year. He has led the performance and growth of
our car dealerships in South Auckland for three decades and has passed on the mantle of leadership to Michael
Tappenden (South Auckland Motors) and Andrew Craw (Southern Autos). Both Michael and Andrew have worked
alongside Matthew in preparation for the transition and as Chief Executives they are well equipped to tackle the
challenges ahead.
It is important to everyone that our staff stay safe and well in their work environment. Over the last year we increased
our focus on reporting those ‘what if’ moments that can help identify improvements to our systems and processes before
an injury occurs. This work highlighted a need to upgrade our mostly manual health and safety reporting tools with a
mobile digital system that all staff can use. Immediate access to report hazards, incidents and solutions allows all staff
to take an active role in improving health and safety outcomes.
Financial Year 2022: The year that was
Extraordinary is the perfect word to describe this last financial year. For the Group Office leadership team, it has been
invaluable to have our highly capable Dealer Principals and an experienced Board right behind us in our first year.
It is easy to dwell on the challenges of the past year and they were numerous. We traded in an environment of multiple
lockdowns and a traffic light system that appeared to be parked in red. It felt inevitable that the majority of us would be
exposed to Covid-19, with a resulting rolling wave of staff sickness and isolation. This coincided with tight labour and
capacity constraints across all operations. Service departments bore the brunt and many service hours were lost.
Supply chains remained unpredictable and stuck in catch-up mode, exacerbated by the conflict in Ukraine, Covid-19
lockdowns and extreme weather events. Monthly industry registration numbers were largely determined by shipping
arrivals, making trends hard to identify on anything less than a quarterly basis. Materials and manufacturing capacity for
electric vehicles and microprocessors for all products were and remain in critically short supply globally.
For New Zealand, exceptional supply and demand conditions were further complicated by targeted regulatory
intervention via the Government’s clean car rebate/tax and the impending Clean Car Standard.
Despite this disruption and uncertainty, the first three quarters of the financial year saw the favourable trading conditions
of last year continue. Most new vehicles arriving were pre-sold and the order bank remained healthy. Vehicle sales
disrupted in one month were merely deferred.
All external factors aside, what defined our success was the ability to adapt. Our experienced staff and management
teams, franchise partners, business suppliers and customers all showed their willingness to work together to get the job
done. Our decentralised dealership structure enables rapid local decision-making which proves advantageous in times
of such uncertainty. This culminated in revenue for the financial year exceeding $1 billion for the first time. A record
trading profit after tax of $33.3m resulted in total dividends of 62 cents per share, also a record.
Car dealerships
Car dealerships generally experienced another strong year, assisted by higher-than-normal levels of discretionary
income, consumers’ appetite to spend and desirable product. Rarely have conditions aligned in such a way and the
industry benefitted.
Growing social awareness of climate change and global clean vehicle regulations are influencing demand. A potential
customer no longer has to trade-off the desirable features of an ICE (Internal Combustion Engine) vehicle in order to
purchase an electrified one (EV including BEV, PHEV and hybrids). We are reaching an inflexion point and it is changing
the game.
The Government’s clean vehicle policies have incentivised local franchises to secure a supply of EVs from their
international parent. Unfortunately, these vehicles are in short supply globally and the aggressive nature of the emissions
targets appear to be adding to inflationary pressure in the market. While the execution of these policies still presents
many unsolved challenges, the effects of climate change and the global response to this challenge is impacting everyone
and our industry is no exception. The Group is committed to navigating the consequent risks, opportunities and
obligations of the response to climate change in order to optimise sustainable, long-term value for our shareholders.
7
We remain in a mixed powertrain environment, allowing customers to choose a solution that best matches their needs.
The new passenger segment for example is the most advanced on the electrified journey and already EVs in this segment
are approaching 50% market share. The ever-increasing variety of EVs deliver considerable benefits, particularly in urban
environments where range is less of a factor. Across the Group we continue to invest in our electrified infrastructure to
ensure dealerships and staff are equipped to support an increasing number of next generation vehicles that are soon to
be arriving in market.
Source: MIA new vehicle registration data July 2022
The light commercial segment on the other hand is a different beast. Few electrified vehicles are available in this segment
and those that are remain in critically short supply. Operationally, light commercial vehicles often require a combination
of off-road, payload, towing and extended range capability which, at this stage, remains a strength of the current ICE
vehicles.
In terms of dealership redevelopment projects, we still have an extensive workbook and capital commitments ahead to
upgrade existing facilities. Avon City Motors (Sockburn, Christchurch), Timaru Motors and Dunedin City Motors are all in
the process of refurbishment and are due to be completed during the 2022-23 financial year. Team Hutchinson Ford’s
new dealership is complete and fully operational in the heart of the Christchurch CBD. Next will be a complete rebuild of
the Fagan Motors sales and administration building in Masterton. Rising building and labour costs and material shortages
have combined to slow progress and they continue to defer and complicate a number of other projects.
Truck and Tractor dealerships
The Southpac Trucks team has dug deep and delivered excellent results over the last couple of years, including operating
as an essential service during lockdowns to support their customers in keeping the country moving. There will be limited
relief next year as the team works hard to deliver on pent up demand for Kenworth and DAF trucks. Southpac’s new and
sizeable facility in Rotorua is due to begin operating this year, while in Timaru a dedicated TRP (Truck Related Parts)
store is open and the service workshop is in the final stages of construction.
Agricentre South continues to grow its business from strength to strength and we are committed to continuing to invest
in our people and facilities to support the expansion of the Case IH, New Holland and Kubota brands. A significant
upgrade will soon be underway in Gore to enhance that sales and service operation, allowing Case IH and New Holland
to operate from a single site.
Similar to cars, both trucks and tractors have struggled with inconsistent and delayed supply as they were impacted by
manufacturing and supply chain disruptions at a time when demand remained strong. Longer than normal lead times are
the result and these are likely to persist for some time to come. It is a difficult situation for all but our teams’ flexible and
proactive approach, in tandem with our franchise partners, continues to deliver the best possible outcome for customers.
The ‘beating heart’ of our success remains in those teams’ unwavering commitment to product support and customer
service excellence.
0
10,000
20,000
30,000
40,000
50,000
YTD
Jun 20
YTD
Jun 21
YTD
Jun 22
YTD
Jun 20
YTD
Jun 21
YTD
Jun 22
YTD
Jun 20
YTD
Jun 21
YTD
Jun 22
Electric (incl hybrid)
ICE
SUV
Light Commercial
Sales of New ICE and Electric Vehiclesin New Zealand
Passenger
8
Outlook
We continue to observe external economic factors that, in normal circumstances, should see a greater softening in
demand and eventually a correction take place in the market. Despite considerable inflationary pressures across all
aspects of our operations and the wider economy, the future remains particularly difficult to predict but one could safely
speculate that we, as a country and an industry, have yet to experience the full impacts.
Fuel prices remain high but seem to have now dipped from their peak. Housing prices are currently falling but that is
against a 50% rise in the last three years. Interest rates and the cost of living keep going up but wage growth, driven by
labour shortages, counteracts the impact. Globally, the geo-political situation remains precarious, with the related impacts
of the conflict and energy crisis in Europe, droughts and lockdowns in China as well as floods in Japan, all challenging
the ability of supply chains to get on top of demand.
Like most commentators, we continue to expect uncertainty and it is prudent to do so. Directionally, the indicators suggest
we are now in a softening market but the unknown is whether we are flying towards a soft landing or a bumpy one.
Our strategy is designed to adapt to whichever eventuality plays out. Continued investment in our people, processes and
facilities ensures we deliver the best outcomes for our customers, franchise partners and shareholders. Our preference
remains to make long-term capital investments in strategic property assets from which our dealerships can then deliver
sustainable growth. These investments generally take time to bear fruit and they absorb considerable capital but, over
the longer term, they provide flexibility and stability during less favourable times.
We are actively exploring new opportunities that utilise our core competencies. If they should materialise, they may
require capital investment in property assets. We continuously balance investment in our long-term commitments with
our existing loyal partners and our desire to deliver profitable growth in new areas of the business.
We have a great balance of youth and experience across the Group and we are actively working to develop and equip a
new generation of leaders to build our resilience and capability for the challenges ahead.
Thank you to our franchise partners, customers and shareholders
We would like to acknowledge and thank each of our franchise partners for their continued support. We recognise and
appreciate the enormity of the challenge in managing vehicle and parts supply in the current unpredictable environment.
Our teams remain passionate and committed to their long-term success as well as ours and we look forward to continuing
to partner with them into the future.
To all our customers who we serve through the Group’s dealer network, we value your business and look forward to
continuing to support your future needs. Thank you for your patience and understanding, our friendly teams are always
there to help.
To our shareholders, thank you for your support during the leadership transition and for having a long-term outlook that
enables the Directors and Management to invest for tomorrow.
A P Gibbons
Chief Executive
9
Group dealerships
Company Name
Chief Executive /
Dealer Principal
(DP)
Franchises Location Web address
Southpac Trucks Ltd Maarten Durent Kenworth & DAF
Heavy Trucks
Manukau City,
Hamilton, Rotorua,
New Plymouth,
Palmerston North &
Christchurch
www.spt.co.nz
South Auckland Motors Ltd Michael Tappenden Ford & Mazda Manukau City, Auckland
Airport, Botany, Takanini
& Pukekohe
www.southaucklandford.co.nz
www.southaucklandmazda.co.nz
Southern Autos – Manukau Ltd Andrew Craw Suzuki, Peugeot,
Citroen & Isuzu
Manukau City & Botany www.southernautos.co.nz
Energy City Motors Ltd Russell Dempster Ford New Plymouth & Hawera www.energyford.co.nz
Energy Motors Ltd Shaun Biesiek (DP) Hyundai & Isuzu New Plymouth www.energyhyundai.co.nz
www.energymotorsisuzu.co.nz
Ruahine Motors Ltd David Wills Ford Waipukurau www.ruahinemotors.co.nz
The Hawkes Bay Motor
Company Ltd
Paul Bond (DP) Nissan & Mahindra Hastings www.hawkesbaynissan.co.nz
Fagan Motors Ltd Keith Allen Ford & Mazda
Suzuki & Kawasaki
Motorcycles
Masterton www.faganford.co.nz
www.faganmazda.co.nz
www.fagansuzuki.co.nz
Capital City Motors Ltd Matthew Carman Ford & Mazda Lower Hutt,
Wellington, Porirua &
Kapiti
www.capitalcityford.co.nz
www.capitalcitymazda.co.nz
M.S. Motors (1998) Ltd Alan Kirby Ford Nelson
www.msford.co.nz
Nelson KIA
Service Lane
Bridgestone Tyres
Nelson
Richmond
Motueka & Richmond
www.nelsonkia.co.nz
Hutchinson Motors Ltd John Hutchinson Ford
Bridgestone Tyres
Christchurch &
Greymouth
Christchurch & Hornby
www.thf.co.nz
Avon City Motors Ltd John Luxton Ford Christchurch & Rangiora www.avoncityford.co.nz
Avon City Motorcycles Ltd John Luxton Suzuki & BMW
Motorcycles
Mahindra
Christchurch
www.avoncity.co.nz
Timaru Motors Ltd Wayne Pateman Ford & Mazda Timaru www.timaruford.co.nz
www.timarumazda.co.nz
Dunedin City Motors Ltd Robert Bain Ford & Mazda Dunedin, Oamaru
& Alexandra
www.dcford.co.nz
www.dcmazda.co.nz
Macaulay Motors Ltd Grant Price
Tim Rabbitte (DP)
Ford & Mazda
Mahindra
Invercargill, Queenstown
& Wanaka
www.macaulayford.co.nz
www.macaulaymazda.co.nz
Southern Lakes Motors Ltd Grant Price
Richard Burns (DP)
Mitsubishi & Nissan Queenstown & Wanaka www.southernlakesmotors.co.nz
Agricentre South Ltd
Grant Price Case IH Tractors &
Kuhn Implements
Invercargill, Gore, Milton,
Cromwell & Ranfurly
www.agricentre.co.nz
New Holland, Kubota
Tractors & Norwood
Ag Equipment
Invercargill, Gore &
Cromwell
Yamaha Motorcycles Gore
10
The consolidated financial statements should be read in conjunction with the accompanying notes.
Consolidated statement of financial performance
for the year ended 30 June 2022
Notes
2022
$000
2021
$000
Revenue
Revenue 999,032 898,511
Other revenue 3,816 2,662
Total revenue 1 1,002,848 901,173
Trading expenses
Cost of products and services sold 815,425 734,905
Remuneration of staff 90,648 83,442
Depreciation and amortisation 8,082 6,785
Property occupation costs 3,964 3,630
Marketing, promotion and training 6,056 5,414
Other operating costs 24,901 23,290
Interest 3 4,401 3,025
Total trading expenses 2 953,477 860,491
Trading profit before tax 49,371 40,682
Taxation
Current tax 4 14,166 11,628
Deferred tax
4 (178) (450)
Total tax on trading 13,988 11,178
Non-controlling interest 2,038 1,580
Trading profit after tax 33,345 27,924
Non-trading items
Fair value revaluation of property (420) (3,445)
Fair valuation of investments 68 170
Total non-trading items before tax (352) (3,275)
Taxation
Deferred tax
4 190 184
Non-trading items after tax (162) (3,091)
Profit attributable to shareholders 33,183 24,833
Profit for the year
Profit attributable to: Shareholders
Trading profit after tax 33,345 27,924
Non-trading items after tax (162) (3,091)
Total attributable to shareholders 33,183 24,833
Non-controlling interest 2,038 1,580
Profit for the year 35,221 26,413
Statistics per share
Basic and diluted earnings per share 7
Profit attributable to shareholders (cents) 101.5 76.0
Trading profit after tax (cents) 102.0 85.4
Dividends
Dividends (cents per share) 62.0 55.0
Total dividends ($000) 20,271 17,982
Net tangible assets per share ($)
9.25 8.00
11
The consolidated financial statements should be read in conjunction with the accompanying notes.
Consolidated statement of comprehensive income
for the year ended 30 June 2022
Notes
2022
$000
2021
$000
Profit for the year 35,221 26,413
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Property revaluation reserve
Fair value movement 23,982 25,166
Deferred tax 4 (675) 1,089
Items that will be reclassified subsequently to profit or loss when
specific conditions are met
Cash flow hedge reserve
Movement in fair value of hedge derivatives 3,903 (962)
Deferred tax 4 (1,093) 269
Total other comprehensive income for the year 26,117 25,562
Total comprehensive income for the year 61,338 51,975
Total comprehensive income for the year attributable to:
Shareholders 58,879 50,499
Non-controlling interest 2,459 1,476
Total comprehensive income for the year 61,338 51,975
Consolidated statement of changes in equity
for the year ended 30 June 2022
Notes
2022
$000
2021
$000
Total equity at beginning of the year 265,834 230,800
Comprehensive income
Profit for the year 35,221 26,413
Other comprehensive income 26,117 25,562
Total comprehensive income 61,338 51,975
Dividends paid to shareholders 22 (17,982) (15,366)
Dividends paid to non-controlling interest (1,350) (1,575)
Total equity at end of year 20 307,840 265,834
12
The consolidated financial statements should be read in conjunction with the accompanying notes.
Consolidated statement of financial position
at 30 June 2022
Notes
2022
$000
2021
$000
Shareholders’ equity
Share capital 21 15,968 15,968
Retained earnings 171,883 156,682
Property revaluation reserve 113,304 89,997
Foreign exchange cash flow hedge reserve 2,185 (204)
Total shareholders’ equity 303,340 262,443
Non-controlling interest 4,500 3,391
Total equity 307,840 265,834
Current liabilities
Bank borrowings 25 8,732 12,197
At call deposits 24 31,076 32,304
Trade & other payables 12 47,423 54,740
Vehicle floorplan finance 23 28,443 55,866
Financial liabilities – credit contracts 14 956 1,142
Lease liabilities 15 2,027 2,041
Tax payable 5,044 6,016
Financial derivatives – foreign exchange 29 - 332
Total current liabilities 123,701 164,638
Non-current liabilities
Bank borrowings 25 6,000 -
Financial liabilities – credit contracts 14 920 1,666
Lease liabilities 15 19,752 15,607
Total non-current liabilities 26,672 17,273
Total equity and liabilities 458,213 447,745
Current assets
Cash & cash equivalents 13 11,844 14,736
Trade & other receivables 11 39,200 45,152
Inventory 8 137,020 163,378
Financial assets – credit contracts 14 942 1,121
Financial derivatives – foreign exchange 29 3,571 -
Total current assets 192,577 224,387
Non-current assets
Financial assets – credit contracts 14 920 1,666
Intangible assets 16 1,028 1,028
Investments 18 1,356 2,552
Property, plant & equipment 9 238,170 196,619
Deferred tax 4 4,267 5,667
Right of use assets 15 19,895 15,826
Total non-current assets 265,636 223,358
Total assets 458,213 447,745
For the Directors
A J Waugh
Chair of the Board
J W M Journee
Chair of the Audit & Compliance Committee
Authorised for issue on 14 September 2022
13
The consolidated financial statements should be read in conjunction with the accompanying notes.
Consolidated statement of cash flows
for the year ended 30 June 2022
Notes
2022
$000
2021
$000
Operating cash flows
Receipts from customers 1,008,488 897,607
Interest received 108 96
Dividends received 202 202
Payments to suppliers and employees (922,003) (862,531)
Interest paid (4,401) (3,025)
Income taxes paid (15,139) (8,304)
Net operating cash flows 6 67,255 24,045
Investing cash flows
Proceeds from sale of property, plant & equipment 372 1,253
Proceeds from sale of investments 1,264 -
Purchase of property, plant & equipment (24,154) (19,460)
Net investing cash flows (22,518) (18,207)
Financing cash flows
Movement in bank borrowings (24,888) 5,978
Repayment of lease liabilities (2,181) (2,050)
(Decrease)/increase in deposits (1,228) 4,916
Dividends paid to shareholders (19,332) (16,941)
Net financing cash flows (47,629) (8,097)
Net change in cash held (2,892) (2,259)
Cash at beginning of year 14,736 16,995
Cash at end of year 13 11,844 14,736
-
14
Notes to the consolidated financial statements
for the year ended 30 June 2022
Index to the notes
Note Page
Preparation of the consolidated financial statements
About the reporting entity 15
Statement of compliance 15
Basis of preparation 15
Critical accounting assumptions, estimates and judgements 15
General accounting policies
Impairment 16
Goods & services tax 16
Changes in accounting policies and accounting standards 16
Financial performance
The notes in this section explain the Group’s profit for the year and give more detail of items
that make up its revenue and expenses.
1 Revenue 17
2 Expenditure 17
3 Interest 18
4 Taxation 18
5 Segment report 19
6 Reconciliation of profit for the year with operating cash flows 20
7 Earnings per share 20
Financial position
This section describes the assets and liabilities the Group uses to generate profit including
its working capital.
8 Inventory 21
9 Property, plant and equipment 21
10 Christchurch greenway 23
11 Trade and other receivables 23
12 Trade and other payables 24
13 Cash and bank accounts 24
14 Credit contracts 25
15 Leases 26
16 Intangible assets 28
Investments
This section describes the corporate structure of the Group and how the results and balances
of the individual companies are combined into the consolidated financial statements.
17 Subsidiaries 29
18 Investments 29
Funding
This section describes the sources of funding the Group uses and how they are managed.
19 Capital management 30
20 Movements in equity 31
21 Share capital 32
22 Dividends 32
23 Vehicle floorplan finance 32
24 At call deposits 33
25 Bank borrowing 33
26 Financial instruments 34
27 Reconciliation of liabilities arising from financial activities 36
Managing risk
The notes in this section describe how the Group manages the financial risks that affect its
financial position and performance.
28 Financial risk management 37
29 Financial derivatives – foreign exchange 38
30 Dealership franchise agreements 39
Other notes
31 Related party transactions 40
32 Contingencies 40
33 Events after the reporting date 40
15
Notes on the preparation of the consolidated financial statements
About the reporting entity
The financial statements presented are for The Colonial Motor Company Limited (the Company) and its
subsidiaries (the Group). The Company is an FMC Reporting Entity under the Financial Markets
Conduct Act 2013 (FMCA 2013). Where an FMC Reporting Entity prepares consolidated financial
statements, parent company disclosures are not required and have therefore not been included in these
financial statements.
The Group is a Tier 1 for profit reporting entity as set out in the External Reporting Board’s Accounting
Standards Framework. The Colonial Motor Company Limited is a New Zealand registered company
listed on the New Zealand Stock Exchange.
The Group’s principal activity is operating franchised motor vehicle dealerships. There is a list of the
dealerships and the franchises they represent on page 9.
Statement of compliance
These consolidated financial statements have been prepared in accordance with Generally Accepted
Accounting Practice in New Zealand (NZ GAAP). They comply with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS)
issued by the New Zealand Accounting
Standards Board, Part 7 of the FMCA 2013 and the Companies Act 1993. They also comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board.
The consolidated financial statements were authorised for issue by the Directors on 14 September 2022.
Basis of preparation
The consolidated financial statements have been prepared
• on an historical cost basis, modified by the revaluation of certain assets and liabilities to fair value
through profit or loss and other comprehensive income, and
• on the assumption that the Group is a going concern
The consolidated financial statements are presented in New Zealand Dollars, which is the Group’s
functional and presentation currency, rounded to the nearest thousand dollars.
Critical accounting assumptions, estimates and judgements
The Group makes assumptions, estimates and judgements concerning the future. They are based on
historical experience and other factors including expectations of future events that are believed to be
reasonable under the circumstances. Actual results may differ from these estimates.
Estimates, judgements and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any future
periods affected.
Estimates and judgements that have a significant risk of causing a material adjustment to the carrying
amount of the assets and liabilities are detailed in the relevant notes of these consolidated financial
statements.
16
Notes on accounting policies
The accounting policies set out in these notes have been applied consistently to all periods presented
in these consolidated financial statements.
The following general accounting policies relate to the overall consolidated financial statements.
Policies specific to particular transactions or balances are detailed within each relevant note and are
highlighted by a solid blue bar:
Specific accounting policy
General accounting policies
Impairment
The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether
there is any objective evidence of impairment. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its estimated recoverable amount. Impairment losses directly reduce the
carrying amount of assets and are recognised as an expense in the consolidated statement of financial
performance.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing fair value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate of the time value of money and risks specific to that
asset.
In respect of all assets (except goodwill and intangibles with indefinite useful lives) an impairment loss
is reversed if there has been a change in the estimate used to determine the recoverable amount.
Goods & Services Tax
The consolidated financial statements are prepared net of Goods & Services Tax (GST) with the
exception of receivables and payables which are stated including GST.
Changes in accounting policies and accounting standards
There have been no changes in the existing accounting policies during the year.
No new accounting standards which became effective from 1 July 2021 were considered to be material
for the Group.
New standards, interpretations and amendments
At the date of authorisation of these consolidated financial statements, certain new interpretations to
existing standards have been published but are not yet effective and have not been adopted early by
the Group.
All pronouncements will be adopted in the first accounting period beginning on or after the effective date
of the new standard. There are no new standards issued but not yet effective that will have a material
impact on the Group in future reporting periods.
17
Notes on financial performance
1 Revenue
Revenue from Contracts with Customers
All of the revenue from contracts with customers arises from the sale of goods or services. The
transaction price is measured as the fair value of the consideration received or receivable and is net of
returns, trade allowances and rebates. All contracts are short term in nature.
For the supply of goods, the performance obligation is considered to be satisfied when control of the
goods has been passed to the buyer. This generally happens on delivery and revenue is recognised at
that time. Payment is usually required before the goods are delivered.
For the supply of services, performance obligations are considered satisfied when the service has been
completed. Revenue is recognised at that time. Payment is due on completion of the service.
The Group sells some products which have extended warranty or maintenance periods. These are part
of the price of the original goods or services and are not identified or treated separately. Any costs
incurred by the Group in respect of these services are recovered from the manufacturers providing the
extended warranties and maintenance agreements.
Other Revenue
Rental revenue arising from premises rental is accounted for on a straight line basis over the lease term.
Interest comprises interest on funds invested and is recognised in
the statement of financial
performance as it accrues using the effective interest rate method. Subsidies received from the
Government in respect of wage costs have been recognised as revenue in the same period as the wage
expenses to which they relate.
2022
$000
2021
$000
Revenue from
Sale of products 926,432 828,119
Sale of services 72,600 70,392
Total revenue from contracts with customers 999,032 898,511
Interest 108 96
Other revenue 3,708 2,566
Total other revenue 3,816 2,662
2 Expenditure
Expenditure in the consolidated statement of financial performance
includes:
2022
$000
2021
$000
Auditor’s remuneration
Audit fees – statutory audit 494 500
Other services - 12
Total auditor’s remuneration 494 512
Operating lease expense 548 578
Directors’ fees 295 204
Bad debts written off 39 31
Donations 39 24
Contributions to retirement savings
CMC Workplace Savings Scheme 842 824
KiwiSaver 1,668 1,367
Increase/(decrease) in impairment allowance for:
Parts inventory obsolescence 41 (3)
Used stock provision 696 (108)
Doubtful debts (12) (49)
Credit contracts (7) (4)
18
3 Interest
Interest expense comprises interest on deposits, vehicle floorplan finance, bank borrowings and bank
overdraft facilities.
See note 28 (b) for interest rate disclosures.
Interest costs are recognised using the effective interest rate method and expensed in the period they
are incurred.
4 Taxation
4(a) Tax expense
Income tax expense comprises current and deferred tax. Current tax is the tax payable on taxable
profit for the period using the existing tax rates.
Tax expense is recognised in the consolidated statement of financial performance except when it
relates to items recognised directly in the consolidated statement of comprehensive income.
2022
$000
2021
$000
Trading profit before tax 49,371 40,682
Non-trading items before tax (352) (3,275)
Profit before tax for the year 49,019 37,407
Expected tax charge at 28% 13,726 10,474
Tax adjustments for:
Non-deductible expenses 334 1,178
Tax exempt income (71) (146)
Changes in unrecognised temporary differences 177 122
Actual current tax charge 14,166 11,628
Movement in deferred tax (368) (634)
Total tax expense 13,798 10,994
Effective current tax rate on trading profit before tax 28.7% 28.6%
Effective current tax rate on profit before tax 28.9% 31.1%
4(b) Deferred tax
The calculation of deferred tax uses the liability approach that recognises deferred tax assets and
liabilities based on differences between the accounting and tax values of specific items in the
consolidated statement of financial position.
Deferred tax assets and liabilities are carried:
• at the tax rates expected to apply when the assets are recovered or liabilities settled
• on the basis that the Group expects future profits to exceed any reversal of existing temporary
differences
19
Deferred tax asset
2022
$000
2021
$000
At the beginning of the year 5,667 3,675
Movement through the consolidated statement of
financial performance
On trading profit 178 450
On non-trading property depreciation 190 184
Movement through property revaluation reserve (675) 1,089
Movement through foreign currency cash flow hedge
reserve
(1,093) 269
At the end of the year 4,267 5,667
Deferred tax assets and liabilities are attributable to the following:
Trade and other payables 6,221 5,608
Trade and other receivables 10 13
Employee benefits 1,587 1,085
Inventories 1,041 834
Financial derivatives (1,000) 93
Impairment allowance for finance bad debts 4 6
Property, plant and equipment (5,570) (4,431)
Building depreciation rule change 1,974 2,459
Deferred tax asset at the end of the year 4,267 5,667
4(c) Imputation credit account
2022
$000
2021
$000
Imputation credits available for use in subsequent
reporting periods
46,003 39,592
The New Zealand imputation regime enables tax credits to be attached to dividends paid to
shareholders as a method of avoiding double-taxation of company profits.
5 Segment report
The Group is structured so that each motor vehicle dealership is managed locally under the control of a
dealer
principal who reports monthly to the Group Chief Executive. The Group Chief Executive is
considered to be the Chief Operating Decision Maker in terms of NZ IFRS 8 - Operating Segments. The
key measures used to assess
dealership performance are revenue, trading profit before tax, trade
receivables and inventory.
The dealerships have similar economic characteristics, financial performance (as measured by their
gross profitability), products, services, processes, customers, methods of distribution and all operate in
the same regulatory environment. On that basis, all of the Group’s operating segments ha
ve been
aggregated into a single reporting segment to most appropriately reflect the nature and financial effects
of the business activities in which the Group engages and the economic environment in which it operates.
2022 2021
Operating
segment Corporate
Total
Group
Operating
segment Corporate
Total
Group
$000 $000 $000 $000 $000 $000
Revenue from customers 1,002,223 517 1,002,740 900,453 624 901,077
Depreciation & amortisation 5,229 2,853 8,082 4,469 2,316 6,785
Interest income 108 - 108 96 - 96
Interest expense 2,948 1,453 4,401 2,167 858 3,025
Trading profit before tax 47,869 1,502 49,371 38,544 2,138 40,682
Income tax 13,713 453 14,166 10,739 889 11,628
Total assets 224,249 233,964 458,213 250,653 197,092 447,745
Material non-cash items
Revaluation loss on
property
- (420) (420) - (3,445) (3,445)
Deferred tax credit 336 32 368 316 318 634
20
6 Reconciliation of profit for the year with operating cash flows
2022
$000
2021
$000
Profit for the year 35,221 26,413
Adjustments for non-cash items
Depreciation and amortisation 8,082 6,785
Revaluation of property and investments 352 3,275
Cancellation of lease (11) -
Movement in
Impairment of credit contracts (7) (3)
Deferred tax (368) (634)
Movement in working capital
Trade and other payables (7,349) 12,221
Tax payable (972) 3,334
Trade and other receivables 5,950 (3,260)
Inventory 26,357 (24,086)
Net cash flow from operations 67,255 24,045
7 Earnings per share
2022
$000
2021
$000
Trading profit after tax 33,345 27,924
Profit after tax for the year attributable to shareholders 33,183 24,833
Weighted average number of shares on issue – see note 21
Basic and diluted earnings per share on
Cents per
share
Cents per
share
Trading profit after tax 102.0 85.4
Profit after tax attributable to shareholders 101.5 76.0
Basic and diluted earnings per share are calculated by dividing the profit after tax attributable to
shareholders by the weighted average number of shares outstanding during the year.
There were no potentially dilutive ordinary shares outstanding at the reporting date (2021 : none).
21
Notes on financial position
8 Inventory
New and used vehicles are valued at the lower of cost or net realisable value. Parts, accessories,
workshop stocks, fuels and gases are recognised at cost, using where applicable, the first in first out
method. Cost includes expenditure incurred in acquiring the inventory and bringing it to the existing
location and condition. Due allowance has been made for obsolete and slow moving stock.
Inventory, particularly of vehicles, is reviewed on a transaction by transaction basis as part of normal
commercial trading. Estimates and judgement are required to ensure that carrying values do not exceed
net realisable values at the reporting date.
Parts inventory is reviewed regularly for slow-moving or obsolete stock. At each reporting date an
impairment allowance is recognised based on the age of stock and historical evidence of inventory held
for a similar timeframe. The movement in the parts obsolescence allowance is as a result
of a
combination of the realisation and scrapping of aged stock during the reporting period.
2022
$000
2021
$000
Vehicles 107,998 139,274
Parts, accessories, workshop fuels and gases 32,670 27,086
Impairment allowance (3,648) (2,982)
Total inventory 137,020 163,378
Total inventory write-down including parts, parts obsolescence and vehicles 864 410
9 Property, plant & equipment
Land & buildings
Land and buildings owned by the Group are categorised as property, plant & equipment because they
are owned specifically for use in the revenue generating operations of its subsidiaries.
All land and buildings, other than properties held for sale (if any), were independently valued at reporting
date by QV Asset & Advisory to comply with Property Institute New Zealand Professional Practice
Standards and International Valuation Standards.
All property has been classified as level 2 in the fair value hierarchy specified in NZ IFRS 13 – Fair Value
Measurement because there is an observable active market for these type of assets.
All property was valued at its highest and best use by applying a direct sales comparison approach,
which derives fair values by comparing the property to similar assets that have recently sold on the open
market.
Any revaluation surplus is credited to the property revaluation reserve unless it reverses a revaluation
decrease for the same asset previously recognised in profit or loss. In that case, the surplus is credited
to profit or loss to the extent of the decrease previously charged. Any revaluation deficit is recognised
through profit or loss unless it directly offsets a previous surplus in the same asset in the property
revaluation reserve.
Other property, plant & equipment
Property, plant & equipment other than land and buildings are carried at cost less accumulated
depreciation and impairment losses. Cost includes all expenditure that is directly attributable to the
acquisition of the asset. Software that is integral to the functionality of the related equipment is
capitalised as part of the asset.
Depreciation
Land is not depreciated. The economic life of buildings has been assessed at between 33 and 100
years and buildings are depreciated accordingly. Any accumulated depreciation on buildings at
revaluation date is eliminated against the gross carrying amount of the asset and the net amount is
restated to the revalued amount of the asset.
Other plant and equipment has been depreciated over its estimated useful life on an accounting basis
that the Group considers best reflects the decline in the economic service potential of each class of
assets. The general rate bands are shown below:
Furniture, fittings and equipment 7.5 – 60% of Diminishing Value
Service vehicles 18 – 36% of Diminishing Value
Carrying values and depreciation rates are reviewed at each reporting date to ensure depreciation
rates are appropriate.
22
Land &
buildings
Furniture,
fittings &
equipment
Service
vehicles Total
$000 $000 $000 $000
Cost or fair value at 30 June 2020 90,870 25,992 5,896 122,758
Accumulated depreciation - (17,548) (3,343) (20,891)
Revaluation 59,242 - - 59,242
Net book value at 30 June 2020 150,112 8,444 2,553 161,109
Additions 14,859 3,337 1,284 19,480
Disposals (115) (279) (373) (767)
Depreciation (2,071) (2,035) (818) (4,924)
Movement in revaluation 21,721 - - 21,721
Net book value at 30 June 2021 184,506 9,467 2,646 196,619
Cost or fair value at 30 June 2021 103,543 29,050 6,807 139,400
Accumulated depreciation - (19,583) (4,161) (23,744)
Revaluation 80,963 - - 80,963
Net book value at 30 June 2021 184,506 9,467 2,646 196,619
Additions 20,769 2,785 621 24,175
Disposals (59) (323) (112) (494)
Depreciation (2,697) (2,165) (830) (5,692)
Movement in revaluation 23,562 - - 23,562
Net book value at 30 June 2022 226,081 9,764 2,325 238,170
Comprised of:
Cost or fair value at 30 June 2022 121,556 28,944 6,217 156,717
Accumulated depreciation - (19,180) (3,892) (23,072)
Revaluation 104,525 - - 104,525
Net book value at 30 June 2022 226,081 9,764 2,325 238,170
2022
$000
2021
$000
Revaluation deficit recognised as non-trading items through the statement
of financial performance (420) (3,445)
Capital work in progress included in the value of land & buildings at
reporting date. Capital work in progress is not subject to depreciation until
completed and brought into use 4,063 2,542
Capital commitments
Commitments to the future acquisition of new dealership facilities and
development projects to existing facilities 2,637 7,086
If land and buildings were measured at cost the carrying value would be $121,556k (2021: $103,543k)
23
10 Christchurch greenway
The dealership property occupied by Team Hutchinson Ford on Tuam Street in Christchurch is owned
by the Group and is in the city’s Southern Frame designated area. In April 2018 agreement was reached
with Crown authorities for the Group to grant an easement in perpetuity across the site for the
construction of the greenway. The agreement involved:
1. a cash settlement to meet the cost of demolishing part of the workshop and remodelling the
remaining buildings to accommodate the business over a split site, and;
2. acquisition of an adjacent area of land to replace part of the land taken by the greenway.
Initial recognition of the agreement created an asset for the full value of the settlement receivable from
the Crown ($7.555m) based on the reasonable expectation that the agreement was legally binding and
all conditions imposed on the parties would be met. At the same time a liability for the same amount
was established in recognition of the Group’s future performance obligations to clear the land and make
changes to existing buildings in order to continue its business.
At the reporting date the outstanding receivable has been paid in full and ownership of the adjacent land
parcel has been transferred to the Group. All of the performance obligations have been completed and
the easement across the site granted. The final cost of the building work was in excess of the amount
received from the Crown. This amount has been included in additions to the cost of buildings.
2022 2021
$000 $000
Other Receivables
Balance at 1 July 2,555 2,555
Payments received (2,555) -
Balance at 30 June – note 11 - 2,555
Performance obligation
Balance at 1 July 1,072 5,404
Expenditure incurred (2,067) (4,332)
Transfer to Property, plant & equipment 995 -
Balance at 30 June – note 12 - 1,072
11 Trade and other receivables
2022
$000
2021
$000
Trade receivables 37,319 41,646
Impairment allowance for expected credit losses (36) (48)
37,283 41,598
Other receivables – greenway agreement note 10 - 2,555
Other receivables 1,631 780
Prepayments 286 219
Carrying value of trade and other receivables 39,200 45,152
Bad debts written off in year 39 31
The net carrying value of trade receivables and prepayments is considered to be their fair value.
24
The Group has adopted the simplified model of recognising lifetime expected credit losses as detailed
in NZ IFRS 9 – F inancial Instruments, as none of the trade or other receivables contain a significant
financing component.
In measuring expected credit losses, the trade receivables have been assessed on a collective basis
as they share similar credit risks. Expected loss rates are based on historic trading patterns over the
last 5 years adjusted for anticipated changes in the 12 months following reporting date.
The items included in other receivables do not share the same credit risks as trade receivables and no
credit loss is expected to arise.
Trade receivables are written off as bad debts when there is no expectation of recovery.
On the above basis the expected credit loss of trade receivables is as follows:
2022
$000
2021
$000
Expected credit loss rate 0.10% 0.11%
Gross carrying amount 37,319 41,646
Expected credit loss 36 48
Movements in the loss allowance are as follows:
Balance at 1 July 48 97
Allowance recognised in the statement of financial
performance (11) (47)
Allowance recovered (1) (2)
Balance at 30 June 36 48
12 Trade and other payables
Trade and other payables are stated at amortised cost.
Employee benefits
The Group provides for benefits accruing to employees for:
• salaries and wages earned but not yet paid
• annual leave accrued but not yet taken
• short-term incentives arising from contractual obligations or when it is probable that the incentives
will be paid and they can be reliably measured
Trade and other payables are all due within one year.
2022
$000
2021
$000
Trade payables 28,827 34,977
Employee benefits 9,091 9,269
Other payables – performance obligation note 10 - 1,072
Other payables 9,505 9,422
Total trade and other payables 47,423 54,740
13 Cash and cash equivalents
2022
$000
2021
$000
Bank accounts in funds 11,844 14,736
Net cash and cash equivalents 11,844 14,736
These balances include all cash and cash equivalents.
Bank overdrafts are payable at call.
The Company guarantees the amounts owing by its subsidiaries under overdraft facilities and the
subsidiaries guarantee the indebtedness of the Company.
Aggregate limit on bank overdrafts 6,835 6,835
25
14 Credit contracts
Dealerships arrange finance for customers to buy vehicles with a number of finance companies. Before
the customers enter into the finance agreements, information is gathered and provided to the finance
companies to check that customers meet their creditworthiness, affordability and
other criteria.
Dealerships make the initial loans to the customer but instantaneously assign them to the finance
company.
Credit contracts with Motor Trade Finance Limited
Credit contracts with Motor Trade Finance Limited (MTF) differ from the other finance companies. MTF
retains the right of recourse to the dealership if a particular customer defaults on their payments.
Accounting for the MTF credit contracts results in creating a receivable from the customer (which is
collected by MTF due to the assignment) and an equal and opposite liability for the amount that may
become payable to MTF if the customer defaults. In the normal course of business, the receivable and
liability for each finance deal reduce in parallel as customers make routine repayments.
The financial liabilities under credit contracts at reporting date consist of the outstanding balances on
customers’ accounts. The movement in the liability is detailed in note 27.
Financial receivables – credit contracts
There is a risk if customers fail to make the necessary repayments that the receivable will not be
recoverable and the liability will remain payable to MTF. Factors that mitigate
this risk include:
• credit checks that are carried out when the finance is arranged
• timely credit control practices
• the number of outstanding loans means there is no concentration of credit risk on a restricted
number of debtors
• security over the vehicles that are financed so that, if other measures fail, the vehicles can be
repossessed and sold to offset bad debts
Bad debts
If customers default and the sale proceeds of the vehicle do not cover the outstanding balance, the
deficit is recognised as an expense in the statement of financial performance.
Impairment
The balances are routinely reviewed for impairment and an allowance is made for amounts that are
unlikely to be recovered. The impairment allowance is calculated as a percentage of net amounts
outstanding under the credit contracts based on historic trading patterns.
Amounts owed by customers are recoverable over a number of years. To determine the percentage
used for the impairment allowance, estimates are based on historical data for contracts in default.
Financing agreements outstanding at reporting date that have been assigned to MTF with recourse
have the following repayment schedule:
2022
$000
2021
$000
Up to 1 year 956 1,142
1 to 2 years 494 913
2 to 3 years 324 490
3 to 4 years 80 230
4 to 5 years 22 33
Total 1,876 2,808
Impairment allowance (14) (21)
Carrying value of receivables 1,862 2,787
Number of credit contracts 123 170
Value of impaired accounts written off in the year ($000) - -
Actual arrears past due at 30 June ($000) 12 33
Arrears as a percentage of total 0.66% 1.17%
Total value of accounts in arrears at 30 June ($000) 135 304
Accounts in arrears as a percentage of total 7.21% 10.83%
26
The amounts payable by customers under the financial assets – credit contracts, including future
interest, have the following repayment profile, which is the maximum amount the Group may be required
to pay if subject to recourse under its contractual obligations.
2022
$000
2021
$000
Less than 1 year 1,103 1,371
1 to 2 years 562 1,041
More than 2 years 460 817
Total 2,125 3,229
15 Leases
At the start of a contract the Group assesses whether the contract is, or contains, a lease being the
right to control the use of an identified asset for a period of time in exchange for consideration. With
the exception of low value assets and short term leases, at the start date of the lease the Group
recognises a right of use asset, representing the right to use the underlying asset, and a lease liability,
representing the obligation to make lease payments.
The right of use asset is initially measured at cost comprising the lease liability recognised, any initial
direct costs including lease payments made before the commencement date, less any incentives.
Right of use assets are then depreciated on a straight line basis over the shorter of the lease term or
the estimated useful life of the assets. The Group also assesses the impairment of the right of use
asset when such indicators exist.
The lease liability is recognised from the start date of the lease measured at the present value of lease
payments to be made over the life of the lease. When calculating the present value of lease payments,
the Group uses its incremental borrowing rate at the commencement date of the lease as the interest
rate implicit in the lease is not determinable. After the commencement date, the amount of the lease
liability is increased to reflect the addition of interest charges and reduced for the lease payments
made. The carrying amount of lease liabilities is remeasured if there is a change in the terms of the
lease (for example a change in the length of the lease or a change in the lease payments). The term
of the lease includes any rights of renewal where there is a reasonable level of certainty that the lease
will be renewed.
Lease payments on low value assets or short term leases (less than 12 months) are recognised as an
expense on a straight line basis over the lease term.
The Group has leases for dealership facilities, including showrooms, workshops, office space and
storage areas at a number of sites across the country and for office accommodation in Wellington.
With the exception of short term leases and leases on low value assets, each lease is reflected on the
statement of financial position as a right of use asset and an associated lease liability. Property leases
have original terms up to 24 years and most have rights to renew exercisable at the option of the
Group. The majority of leases allow for a market rent increase when renewals are exercised and some
have annual inflation increases.
The following table summarises the Group’s leasing activities:
Number
leased
Range of
remaining
terms (years)
Average
remaining
term (years)
Number with
renewal options
Number
with rent
reviews
Dealership
facilities
27 1 – 16
7 24 23
Office
building
1 8 8 1 1
27
The value of right of use assets by type is summarised below:
Dealership
facilities
Office
building Total
$000 $000 $000
At 1 July 2020 11,790 1,347 13,137
Additions 4,709 - 4,709
Depreciation (1,881) (139) (2,020)
Right of use assets at 30 June 2021 14,618 1,208 15,826
Additions 6,459 - 6,459
Depreciation (2,117) (139) (2,256)
Disposals (134) - (134)
Total right of use assets at 30 June 2022 18,826 1,069 19,895
Lease liabilities are presented as current or non-current liabilities based on the maturity date of the
underlying lease. The maturity of lease liabilities is as follows:
Within
one
year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
5 to 10
years
Over
10
years
$000 $000 $000 $000 $000 $000 $000
2022
Lease liability 2,027 1,877 1,773 1,804 1,825 7,235 5,238
Finance charge 653 592 537 482 426 1,342 393
2021
Lease liability 2,041 1,687 1,480 1,245 1,234 5,868 4,093
Finance charge 577 510 453 404 359 1,122 324
Interest costs for the year on lease liabilities was $649k (2021: $612k). This has been included in
interest in the statement of financial performance.
A number of leases have right to renew options exercisable by the lessee. The Group has included all
of these renewal options in the right of use asset with the exception of three properties which are sub-
leased and exercise of the renewal is subject to the head lease.
The Group has a number of properties which are leased on terms which have less than 12 months to
run. The cost of these leases was $548k (2021: $578k) for the year and has been included in property
occupation costs in the statement of financial performance. At 30 June 2022 the total commitment on
these leases was $145k (2021: $258k).
The Group owns some properties that are not completely occupied by Group companies and the space
is leased to third parties. The leases are negotiated under normal commercial arrangements with
varying terms, escalation clauses and renewal conditions and without undue restrictions. Rent of
$690k (2021: $764k) has been included in other revenue. The rent is receivable during the non-
cancellable periods of these leases according to the following schedule.
Lease receivables
2022
$000
2021
$000
Within one year 890 497
Between one and two years 863 266
Between two and five years 1,490 489
Over five years 258 141
Total operating lease receivables 3,501 1,393
28
16 Intangible assets
Intangible assets consist of goodwill.
Goodwill is recognised on acquisitions of subsidiaries or purchases of business assets and represents
the excess of the acquisition costs over the fair value of the individually identified acquired assets and
liabilities at acquisition date.
Goodwill relates to the acquisition of business assets which have no foreseeable limit to the period over
which they are expected to generate cash inflows for the Group. As such they are considered to have
an indefinite useful life.
The value of intangibles is compared with the “value in use” of the affected dealerships, being South
Auckland Motors Ltd and Dunedin City Motors Ltd, which have been identified as the cash generating
units associated with the intangibles. Impairment of the intangible assets is recognised if there is
considered to be a permanent reduction in the “value in use”.
Impairment testing calculations require the use of estimates and assumptions. The calculations of “value
in use” are based on the actual results for the past five reporting periods together with the projected
results for the next five reporting periods. It was assumed that there would be an initial reduction in
profitability from the levels seen in 2022 as the economy contracts followed by a stabilisation at this
level.
Key assumptions relate to the general economic outlook, the level of the new and used vehicle industries
and the performance of the Group’s business units in this environment.
The discount rate used in completing the cash flow forecast to assess value in use was 10.2%
(2021: 8.6%).
Management considers that any reasonable change in a key assumption used in the determination of
the value in use would not cause the carrying amount of goodwill to exceed the recoverable amount.
The value of intangible assets was reviewed at 30 June 2022. There was no indication of impairment
below their carrying amount (2021: $Nil).
2022 2021
Goodwill $000 $000
Balance at 1 July 1,028 1,028
Impairment loss during the year - -
Balance at 30 June 1,028 1,028
Cost 1,028 1,028
Accumulated amortisation and impairment - -
Balance at 30 June 1,028 1,028
29
Notes on investments
17 Subsidiaries
Subsidiaries are entities controlled by the Company. Control requires the investor to have exposure or
rights to variable returns and the ability to affect those returns through power over the investee. The
financial statements of subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases. Intra-group balances, and any revenue and
expenses from intra-
group transactions, are eliminated in preparing the consolidated financial
statements.
Non-controlling interests in the results and equity of subsidiaries are shown separately in each of the
consolidated financial statements. They represent the portion of the profit or loss, other comprehensive
income and net assets of subsidiaries that are not held by the Group based on their respective ownership
interests.
All subsidiaries are 100% owned (2021: 100%), with the exception of Southpac Trucks Limited which is
85% owned ( 2021: 85%). All subsidiaries have a reporting date of 30 June. All Group companies are
registered in New Zealand. Subsidiary companies operate as motor vehicle dealerships and related or
incidental activities. The Company provides administrative and financial services to the subsidiaries as
well as leasing them, at market rates, many of the properties they occupy.
Trading subsidiaries
Agricentre South Ltd, Avon City Motorcycles Ltd, Avon City Motors Ltd, Capital City Motors Ltd,
Dunedin City Motors Ltd, Energy City Motors Ltd, Energy Motors Ltd, Fagan Motors Ltd, Hutchinson
Motors Ltd, M.S. Motors (1998) Ltd, Macaulay Motors Ltd, Ruahine Motors Ltd, South Auckland
Motors Ltd, Southern Autos – Manukau Ltd, Southern Lakes Motors Ltd, Southpac Trucks Ltd, The
Hawkes Bay Motor Company Ltd and Timaru Motors Ltd.
Non-trading subsidiaries
Agricentre Ltd
(formerly Advance Agricentre Ltd), Avery Motors Ltd, Capital City Paint & Panel Ltd,
Central Lakes Automotive Ltd, East City Ford Ltd, Jeff Gray Ltd, The Motor Company Ltd
(formerly
Metro Motors (Porirua) Ltd)
, Centennial Motors Ltd (formerly Metro Training Services Ltd), Panmure Motors
Ltd, Papakura Ford Ltd, CMC Motors Ltd (formerly Pukekohe Motors Ltd), Queenstown Motors Ltd, South
Auckland Ford Ltd, South Auckland Honda Ltd, Southland Tractors Ltd, Stevens Motors Ltd, CMC
Motor Group Ltd (formerly Tower Motors (2012) Ltd) and Trucks South Ltd.
Non-controlling interest
Southpac Trucks Ltd operates branches and service agencies throughout New Zealand and its principal
place of business is Auckland. The summarised financial position and cash flows at the reporting date
were as follows:
2022
$000
2021
$000
Shareholders’ equity 29,075 21,531
Total liabilities 64,004 74,838
Total equity and liabilities 93,079 96,369
Total assets 93,079 96,369
Net cash flows from:
Operating activities 47,088 19,864
Investing activities (4,116) (1,795)
Financing activities (44,237) (17,565)
Net movement in cash held (1,265) 504
Opening cash balance 2,357 1,853
Closing cash balance 1,092 2,357
18 Investments
2022
$000
2021
$000
Shares in Motor Trade Finance Limited (MTF) 1,355 2,551
Other 1 1
Total investments 1,356 2,552
MTF shares are traded in a quoted but restricted market and are categorised as level 2 in the fair value
hierarchy set out in NZ IFRS 13 – Fair Value Measurement. During the year 547,254 MTF shares were
sold.
Shares are carried at fair value with changes in value recognised through the statement of financial
performance.
30
Notes on funding
19 Capital management
The Group’s capital includes share capital, retained earnings and property revaluation reserves.
The Group’s policy is to maintain a strong capital base to ensure that it continues as a going concern,
to maintain investor, supplier and market confidence and to sustain future development of the business.
The Board regularly monitors future capital requirements and costs to maintain an appropriate balance
of shareholders’ equity and debt. The Group generally maintains the capital structure by setting a
sustainable level of dividends.
The Group issues call debt securities and maintains relationships with a number of financial institutions
to ensure that adequate debt facilities are available to meet short to medium term strategic cash flow
requirements and as a buffer for unexpected events. The Group complied with all of the financial
covenants incorporated in the bank borrowing facilities (note 25) and the at call deposit trust deed (note
24) at the reporting date and at 30 June 2021. There are no other externally imposed capital
requirements.
There has been no change in the Group’s management of capital during the years ended 30 June 2022
or 30 June 2021.
31
20 Movements in equity
Share
capital
(Note 21)
Property
revaluation
reserve
Foreign
exchange
cash flow
hedge
reserve
Retained
earnings
Total
attributable
to share-
holders
Non-
controlling
interest
Total
equity
$000 $000 $000 $000 $000 $000 $000
Balance at 30 June 2020 15,968 64,021 385 146,936 227,310 3,490 230,800
Dividends paid - note 22 - - - (15,366) (15,366) (1,575) (16,941)
Total transactions with
shareholders
- - - (15,366) (15,366) (1,575) (16,941)
Profit for the year - - - 24,833 24,833 1,580 26,413
Other comprehensive income
Property revaluation reserve
Fair value movement - 25,166 - - 25,166 - 25,166
Deferred tax - 1,089 - - 1,089 - 1,089
Transfer on sale of property - (279) - 279 - - -
Foreign exchange cash flow
hedge reserve
Fair value movement - - (818) - (818) (144) (962)
Deferred tax - - 229 - 229 40 269
Total comprehensive income - 25,976 (589) 25,112 50,499 1,476 51,975
Balance at 30 June 2021 15,968 89,997 (204) 156,682 262,443 3,391 265,834
Dividends paid - note 22 - - - (17,982) (17,982) (1,350) (19,332)
Total transactions with
shareholders
- - - (17,982) (17,982) (1,350) (19,332)
Profit for the year - - - 33,183 33,183 2,038 35,221
Other comprehensive income
Property revaluation reserve
Fair value movement - 23,982 - - 23,982 - 23,982
Deferred tax - (675) - - (675) - (675)
Foreign exchange cash flow
hedge reserve
Fair value movement - - 3,318 - 3,318 585 3,903
Deferred tax - - (929) - (929) (164) (1,093)
Total comprehensive income - 23,307 2,389 33,183 58,879 2,459 61,338
Balance at 30 June 2022 15,968 113,304 2,185 171,883 303,340 4,500 307,840
Reserves
The property revaluation reserve arises on the revaluation of land and buildings. Where revalued land
or buildings are sold, the portion of the revaluation reserve that relates to the asset and is effectively
realised, is transferred directly to retained earnings.
The foreign exchange cash flow hedge reserve comprises the cumulative balance of adjustments to
uncompleted transactions that qualify as effectively hedged under NZ IFRS 9 – Financial Instruments.
32
21 Share capital
All shares on issue are fully paid-up and have no par value.
All ordinary shares:
• have equal voting rights
• share equally in dividends
• would share equally in any surplus on winding up
2022
$000
2021
$000
Share capital 15,968 15,968
Thousands
of shares
Thousands
of shares
Number of ordinary shares authorised and on issue 32,695 32,695
Weighted average number of ordinary shares on issue 32,695 32,695
22 Dividends
2022
$000
2021
$000
Date paid Cents per share
Final for the previous year 4 October 2021 40.0 13,078 10,462
Interim for the current year 28 March 2022 15.0 4,904 4,904
Dividends paid during the year 17,982 15,366
For details of the final dividend for the current year, see note 33.
23 Vehicle floorplan finance
When not purchased outright, new vehicles are funded by bailment arrangements, which represent a
financial liability, accounted for at amortised cost. The vehicles are initially included in inventory at the
same value.
Most of the subsidiaries have bailment facilities with finance companies to provide funding for new
vehicles. The main finance company is UDC Finance Limited. Under these facilities the finance
companies own the vehicles that are placed in the control of the subsidiaries as bailees and are available
to display for sale to the public in the dealerships. The subsidiaries pay bailment fees (similar to interest)
for the use of the vehicles. The bailment agreements are subject to financial limits. The vehicles are
purchased from the finance companies when they are sold to customers.
If the subsidiaries breach the bailment agreements, the finance companies retain the right to repossess
and sell the vehicles and the subsidiaries must meet any shortfall of the sale proceeds from the purchase
price of the vehicles.
Liabilities under bailment agreements are due for payment within the next 12 months.
2022
$000
2021
$000
Total vehicle floorplan finance 28,443 55,866
33
24 At call deposits
The Company offers for subscription unsecured call debt securities (Deposits) that are repayable on
demand. Acceptance of Deposits is restricted to shareholders, employees and their associates.
At reporting date the Deposits were constituted by, issued under and described in, a trust deed dated
13 September 2016 between the Company, its Guaranteeing Subsidiaries (as therein defined) and
Public Trust as supervisor for the holders of Deposits (the Depositors). Under the terms of the trust
deed the Guaranteeing Subsidiaries unconditionally guarantee, jointly and severally, the repayment
of the deposits together with interest thereon by the Company and by each of the other Guaranteeing
Subsidiaries. The governance documents, including a product disclosure statement, are available on
the Disclose Register.
Interest is payable on Deposits at rates that vary from time to time as disclosed to the Depositors
on the application form or as subsequently notified to Depositors in writing. The interest rate
applicable at 30 June 2022 was 3.25% (2021: 1.80%).
2022
$000
2021
$000
Deposits 31,076 32,304
Maximum amount of deposits on offer 40,000 40,000
25 Bank borrowing
The Group has wholesale facilities with BNZ, ANZ and Westpac, three highly-respected international
registered trading banks. The facilities with ANZ and BNZ have a maturity date of March 2023 and
have been treated as current. The facility with Westpac has a maturity date of March 2024 and has
been treated as non-current. The facilities are used to finance working capital and are drawn and
repaid as required.
Wholesale borrowing is transacted only by the Company. Its indebtedness is guaranteed by its trading
subsidiaries to the full extent of the facilities.
The agreements with each of the banks are very similar and require the Group to meet financial criteria
based on ratios derived from its financial statements. The Group also pledges to the banks not to grant
security over any of its assets i.e. a “negative pledge”.
2022
$000
2021
$000
Bank borrowing - current 8,732 12,197
Bank borrowing - non current 6,000 -
Combined facility limits 70,000 70,000
34
26 Financial instruments
Financial instruments primarily comprise cash at bank, receivables, payables, credit contracts, forward
exchange contracts, shares in companies, borrowings and loans.
Financial assets and liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial
asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A
financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Except for trade receivables that do not contain a financing component and are measured at
transaction price, all financial assets are initially measured at fair value adjusted for transaction costs
(where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified into
the following categories:
• amortised cost
• fair value through profit or loss
• fair value through other comprehensive income
The classification is determined by both:
• the entity’s business model for managing the financial asset
• the contractual cash flow characteristics of the financial asset
Measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are
not designated as fair value through profit or loss):
• the assets are held to collect contractual cash flows
• the contractual terms of the assets give rise to cash flows that are only payments of principal
and interest
After initial recognition, the assets are measured at amortised cost using the effective interest rate
method. Discounting is ignored where the effect of discounting is not material.
Financial assets at fair value through profit or loss
Financial assets that are held under a different model than ‘held to collect’ or ‘held to collect and sell’
and assets whose cash flows are not solely payments of principal and interest are accounted for as
fair value through profit or loss. All derivative financial instruments fall into this category, except for
those designated and effective as hedge instruments. This category also contains any equity
investments.
Assets in this category are all measured at fair value with gains or losses recognised in the statement
of financial performance. The fair values of the assets in this category are determined by reference to
an active market or using an alternative valuation technique where no market exists.
Financial assets at fair value through other comprehensive income
The Group had no financial assets in this category at 30 June 2022.
35
Impairment of financial assets
Recognition of credit losses is not dependent on identifying a credit loss event but instead considers a
broader range of information when assessing credit risk including past events, current conditions and
reasonable forecasts that could affect the expected collectability of future cash flows. In applying this
approach, distinction is made between:
• financial instruments tha
t have not deteriorated significantly in credit quality since initial
recognition, or that have a low credit risk (Stage 1)
• financial instruments that have deteriorated in credit quality since initial recognition and whose
credit risk is not low (Stage 2)
• financial instruments that have objective evidence of impairment at the reporting date
Twelve month expected credit losses are recognised for Stage 1 instruments while lifetime expected
credit losses are recognised for Stage 2 instruments. Measurement of expected credit losses is
determined by a probability weighted assessment of the credit losses over the life of the instrument
The Group makes use of a simplified approach in accounting for trade receivables. See note 11 for
more information.
Measurement of financial liabilities
Financial liabilities are initially measured at fair value and, where applicable, adjusted for transaction
costs. Subsequently, financial liabilities are measured at amortised cost using the effective interest
method except for derivative financial instruments that are designated and effective as hedging
instruments (see note 29).
Financial instruments by category
2022 2022 2021 2021
$000 $000 $000 $000
Fair value
through
profit or
loss
Amortised
cost
Fair value
through
profit or loss
Amortised
cost
Assets
Cash and bank accounts - 11,844 - 14,736
Trade and other receivables - 38,914 - 44,933
Credit contracts - 1,862 - 2,787
Shares in companies 1,356 - 2,552 -
Financial derivatives – foreign exchange 3,571 - - -
Financial
liabilities at
amortised
cost
Financial
derivatives
at fair value
Financial
liabilities at
amortised
cost
Financial
derivatives
at fair value
Liabilities
Bank borrowings 14,732 - 12,197 -
At call deposits 31,076 - 32,304 -
Trade and other payables 37,918 - 44,246 -
Lease liabilities 21,779 - 17,648 -
Vehicle floorplan finance 28,443 - 55,866 -
Credit contracts 1,876 - 2,808 -
Financial derivatives – foreign exchange - - - 332
36
27 Reconciliation of liabilities arising from financing activities
Movements in liabilities from financing activities during the year were as follows:
At 1 July
2021 Cash flows
Non-cash
changes
At 30 June
2022
$000 $000 $000 $000
Bank borrowing – note 25 12,197 2,535 - 14,732
At call deposits – note 24 32,304 (1,228) - 31,076
Vehicle floorplan finance – note 23 55,866 (27,423) - 28,443
Total short term borrowings 100,367 (26,116) - 74,251
Credit contracts – note 14
Short term 1,142 - (186) 956
Long term 1,666 - (746) 920
Lease liabilities – note 15
Short term 2,041 (14) - 2,027
Long term 15,607 4,145 - 19,752
Total liabilities arising from financing
activities 120,823 (21,985) (932) 97.906
At 1 July
2020 Cash flows
Non-cash
changes
At 30 June
2021
$000 $000 $000 $000
Bank borrowing – note 25 19,235 (7,038) - 12,197
At call deposits – note 24 27,389 4,915 - 32,304
Vehicle floorplan finance – note 23 42,851 13,015 - 55,866
Total short term borrowings 89,475 10,892 - 100,367
Credit contracts – note 14
Short term 1,403 - (261) 1,142
Long term 2,379 - (713) 1,666
Lease liabilities – note 15
Short term 1,813 228 - 2,041
Long term 13,175 2,432 - 15,607
Total liabilities arising from financing
activities 108,245 13,552 (974) 120,823
37
Notes on managing risk
28 Financial risk management
28 (a) Credit risk
Financial instruments which potentially subject the Group to concentrations of credit risk consist
principally of bank balances, deposits, receivables and credit contracts.
The carrying amounts of financial assets represents the Group’s maximum credit exposure.
The Group places its cash and short term investments with high credit quality financial institutions (as
determined by independent credit rating agencies) and limits the amount of credit exposure to any one
financial institution.
The Group performs credit evaluations on all customers requiring credit and generally does not require
collateral or other security to support financial instruments with credit risk.
Concentrations of credit risk with respect to accounts receivable are limited due to the large number of
customers included in the Group’s customer base.
The rate of impairment of amounts receivable under credit contracts (note 14) is low. If the incidence of
recourse requiring balances to be written off were to increase by 1% it would increase the annual amount
written off through profit or loss by $0.02m (2021: $0.03m).
28 (b) Interest rate risk
The Group is not exposed to any specific interest rate risk other than normal interest rate movements
on a daily basis in the New Zealand market. The specific rates that the Group was exposed to during
the year were:
2022 2021
Bank overdrafts 5.95% - 15.10% 3.72% - 9.35%
At call deposits 1.80% - 3.25% 1.80% - 2.30%
Bank borrowing and bailment facilities 1.69% - 5.45% 1.65% - 3.80%
Bank borrowings are unsecured and fall within the agreed committed facility requirements in place with
the Group’s bankers. These facilities have maturity dates ranging from March 2023 to March 2024 and
are expected to be renewed in the normal course of business. The facilities can be drawn on or repaid
at any time and interest rates are variable. The carrying value of these loans is considered to be the fair
value.
Interest rate sensitivity
The effect of a movement of 1% in interest rates would be to change finance costs in the statement of
financial performance and equity by $0.46m per annum (2021: $0.45m).
28 (c) Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual payment obligations. The Group
monitors its cash on an ongoing basis to ensure it has sufficient credit facilities to meet its obligations.
The Group obtains funding for its operations from several sources. In addition to its shareholders’ funds
(made up of share capital and reserves), funding is also provided by depositors through the at call
deposit scheme and from banks and other financial institutions.
Financial liabilities in the form of at c all deposits are repayable at call. Trade and other payables fall
due within one year. The potential repayment profile of amounts due under financial liabilities – credit
contracts is provided in note 14.
There is a risk that the banks may reduce or withdraw the facilities or will be unable to provide the level
of funding required. The Group would then be required to obtain alternative funding which could cost
more. If no alternative funding was available, the consequences would disrupt cash flows and potentially
the Group may not be able to continue to pay suppliers and staff or repay depositors.
If the finance companies were to withdraw the bailment facilities described in note 23 or were unable to
fund as many vehicles as required, the Group would have to seek alternative methods of funding the
vehicles. This could involve bailment agreements with other providers or additional bank funding to
purchase the vehicles outright. The consequences could include increased costs and disruption to the
supply of new vehicles for sale.
38
28 (c) Liquidity risk (continued)
The Group mitigates its funding risk by adopting prudent financial management practices (such as
closely monitoring its cash flows and regularly checking compliance with the financial ratios) and by
maintaining open and honest relationships with the banks and finance companies.
The extent of the bank facilities is disclosed in note 25 and bailment facilities in note 23.
28 (d) Foreign currency risk
The Group enters into fixed rate foreign exchange contracts to create cash flow hedges for the purchase
of trucks on a contract-by-contract basis with firm customer orders and for units ordered for stock. Other
short term transactions are covered by forward exchange contracts and accounted for at that rate.
The principal values (stated in New Zealand Dollars) of forward exchange contracts entered into and
outstanding at each reporting date were denominated in the following currencies.
Currency
2022
$000
2021
$000
Australian Dollars (AUD 143.2m) 156,247 76,208
Euros (EUR 58.8m) 102,047 46,118
Total 258,294 122,326
Due to the close association between foreign currency commitments for imported goods, their selling
price and the underlying forward exchange contracts, it is estimated that any change in the New Zealand
Dollar exchange rates against the above currencies would have had minimal impact on the result and
equity for the year ended 30 June 2022 or 30 June 2021.
29 Financial derivatives – foreign exchange
Foreign exchange asset/(liability)
2022
$000
2021
$000
Balance at 1 July (332) 630
Movement during the year through
Other comprehensive income 3,903 (962)
Statement of financial performance - -
Balance at 30 June 3,571 (332)
The Group uses forward currency contracts to hedge its foreign currency risks. Such derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when hedging the
exposure to variability in cash flows that is either attributable to a particular risk associated with a
recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an
unrecognised firm commitment.
At the inception of a hedge relationship, the Group formally designates and documents the hedge
relationship to which it wishes to apply hedge accounting and the risk management objective and
strategy for undertaking the hedge.
The documentation includes identification of the hedging instrument, the hedged item, the nature of the
risk being hedged and how the Group assesses whether the hedging relationship meets the hedge
effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the
hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the
following effectiveness requirements:
• there is ‘an economic relationship’ between the hedged item and the hedging instrument
• the effect of credit risk does not ‘dominate the value changes’ that result from that economic
relationship
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the
hedged item that the Group actually hedges and the quantity of the hedging instrument that the
Group actually uses to hedge that quantity of hedged item
39
Hedges that meet all the qualifying criteria for hedge accounting all fall into one category of hedge and
are accounted for as described below:
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised in Other Comprehensive
Income in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the
statement of financial performance. The cash flow hedge reserve is adjusted to the lower of the
cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged
item. The Group continues to designate all of the forward contracts as hedging instruments.
The amounts accumulated in Other Comprehensive Income are accounted for depending on the nature
of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition
of a non-financial item such as inventory, the amount accumulated in equity is removed from the
separate component of equity and included in the initial cost or other carrying amount of inventory.
30 Dealership franchise agreements
Each of the trading subsidiaries enters into agreements in their own right with the New Zealand
distributor to sell and service specific brands of motor vehicle in a defined primary marketing area. As
national distributor of two brands of heavy trucks, Southpac Trucks Limited has equivalent agreements
with the international suppliers covering the whole country. Most of these agreements (called either
dealer or franchise agreements) do not have a specific duration. All of the dealer or franchise
agreements contain the right for the distributor/franchisor or the dealer to terminate the arrangements
at short notice. Some of these agreements have finite terms from one to three years, usually without
automatic rights of renewal. If a dealership or franchise agreement is terminated or not renewed there
could be a detrimental effect on the future financial performance of the Group.
The Group manages and mitigates this risk through stable and profitable operating businesses that
deliver on franchise objectives in conjunction with a customer first approach. In addition, strong
relationships with brand partners, at both the Group and dealership levels, focuses on delivering
mutually beneficial long term outcomes to further manage this risk.
40
Other notes
31 Related party transactions
The Group has related party transactions with key management personnel and the CMC Group
Workplace Savings Scheme.
Management personnel
Transactions with key management personnel were:
2022
$000
2021
$000
Short term benefits (including salary, incentives, profit share, use of motor
vehicles and other benefits) 9,302 8,543
Post-employment benefits (including contributions to retirement savings
schemes) 508 229
Share related benefits - -
Total remuneration benefits 9,810 8,772
Key management personnel includes current Directors (executive and non-executive), key management
at the group office and chief executives of all trading subsidiaries.
Some key management personnel have funds on deposit with the Company by way of its unsecured at
call debt securities – note 24 – on the same terms and conditions as all other depositors.
Also see remuneration of Directors on page 48 and remuneration of employees on page 49.
The CMC Group Workplace Savings Scheme
The Company is the sponsoring employer of the CMC Group Workplace Savings Scheme (the Scheme)
which is a defined contribution scheme. It is categorised as an employer-related restricted workplace
savings scheme registered under the FMCA 2013.
The Company ceased to be the trustee of the Scheme when a new trust deed was registered on
18 November 2016 but continues to provide administrative services to the Scheme and received fees
of $0.08m during the year (2021: $0.07m).
The Scheme holds 162,196 (2021: 162,196) ordinary shares in the Company representing 4.9% (2021:
4.4%) of its total assets. The Company is a related party to the Scheme and FMCA limits investments
in related parties to 5% of total assets.
All transactions between key management personnel, the Scheme and Group companies were in the
normal course of business.
32 Contingencies
There were no contingent assets or liabilities at 30 June 2022 (2021: $Nil).
The Group has provided guarantees to PACCAR Australia Pty Limited in respect of obligations owed to
that company. The guarantee is in proportion to the shareholding in Southpac Trucks Limited and the
maximum exposure for the Group is $1.3m.
33 Events after the reporting date
On 22 July 2022, a conditional offer was accepted for the sale of the shares held in The Hawkes Bay
Motor Company Limited.
On 16 August 2022, a dividend of 47.0 cents per share was declared to be paid fully imputed on
3 October 2022, representing a total payment of $15.4 million.
41
Independent auditor’s report
To the shareholders of The Colonial Motor Company Limited
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of The Colonial Motor Company Limited (the
“Company”) and its subsidiaries (the “Group”) on pages 10 to 40 which comprise the consolidated statement
of financial position as at 30 June 2022, and the consolidated statement of financial performance, consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated statement
of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary
of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at 30 June 2022 and its consolidated financial performance and
cash flows for the year then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (“NZ IFRS”) issued by the New Zealand Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group in accordance with Professional and
Ethical Standard 1 International Code of Ethics for Assurance Practitioners (including International
Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards
Board and the International Ethics Standards Board for Accountants’ International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code), and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our Firm also carried out services with respect to verification of voting results at the annual general meeting.
Subject to certain restrictions, partners and employees of our firm may also deal with the Group on normal
terms within the ordinary course of trading activities of the business of the Group. These matters have not
impaired our independence as auditor of the Group. The Firm has no other relationship with, or interest in, the
Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
42
Why the matter is significant How our audit addressed the key audit matter
Recognition of revenue from contracts with
customers
The Group has recognised revenue from contracts
with customers of $999m for the financial year. The
accounting policies for recognition of revenue and
the breakdown of revenue from different
performance obligations are set out in note 1.
Revenue from sale of products is recognised when
the control of the vehicle has passed to the
customer which is normally at the time of delivery of
the vehicle.
We have raised this as a key audit matter due to the
large number of transactions throughout the
reporting period and risk that revenue transactions
have been recorded in the incorrect period based
on the date of recording the transaction compared
to when control of the vehicle has been transferred
to the customer.
In obtaining sufficient and appropriate audit evidence we:
• evaluated the Group’s recognition of revenue by assessing
the processes that management has in place to ensure that
appropriate revenue recognition policies have been
consistently applied in accordance with NZ IFRS 15
Revenue from contracts with customers.
• Tested a sample of sales transactions on either side of the
reporting date to substantiate that the appropriate terms of
the relevant contracts had been satisfied, that the control
of the vehicle had passed to the customer and therefore
revenue was recognised in the correct period.
Valuation and existence of inventory (new and
used vehicles)
The Group has a significant level of inventory on
hand ($137m) held at multiple locations. Much of the
inventory relates to new and used vehicles ($108m)
as set out in note 8.
The assessment of net realisable value can fluctuate
because of general economic conditions, new
vehicle sales, incentives, prices paid on trade in,
age, condition and configuration of vehicles.
We have raised this as a key audit matter due to the
large number of vehicles held at different locations
and the judgement applied to measure vehicles at
the lower of cost or net realisable value in
accordance with NZ IAS 2 Inventories.
In obtaining sufficient appropriate audit evidence we:
• Verified the existence of new and used vehicles through our
attendance at year-end stock counts across all dealerships.
• Confirmed the inventory balances funded by bailment
arrangements and related liabilities directly with the
finance companies.
• Compared the carrying value of a sample of vehicles held at
reporting date to post year end sale values, or if not sold, to
equivalent market evidence to verify that the value of
inventory held at year-end was not overstated.
Other information
The Directors are responsible for the other information. The other information comprises the information in the
Annual Report which accompanies the consolidated financial statements and audit report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of audit opinion or assurance conclusion thereon.
In connections with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements, or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Directors’ responsibilities for the consolidated financial statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS, and for such internal control as the Directors
43
determine is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible on behalf of the Group for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the
External Reporting Board’s website at: https://www.xrb.govt.nz/assurance-standards/auditors-
responsibilities/audit-report-1
Restriction on use of our report
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so
that we might state to the Company’s shareholders, as a body those matters which we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinion we have formed.
Grant Thornton New Zealand Audit Limited
Ryan Campbell
Auckland
14 September 2022
44
Governance statement
The Colonial Motor Company Limited (CMC or Company) is a public company with its shares listed on
the New Zealand Stock Exchange (NZX) operated by NZX Limited.
CMC’s Board of Directors (Board) is committed to maintaining high standards of governance by
implementing a framework of structures, practices and processes that it considers appropriate and
effective. CMC’s corporate governance policies and procedures and its board and committee charters,
which document the framework, have been approved by the Board. Components of the system of
governance are reviewed from time to time.
This statement sets out how these measures meet the recommendations made in the NZX Corporate
Governance Code 2022 and the requirements of the NZX Main Board Listing Rules.
The Board’s view
is that the
corporate governance structures, practices and processes have followed these
recommendations and requirements in the year to 30 June 2022.
The Group is organised so that each motor vehicle dealership is incorporated as a subsidiary company
that is managed locally. The CEO of each Group company reports to the Group Chief Executive. Each
dealership also has a direct relationship with the franchisor(s) that it represents.
1. Code of ethical behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation.
The Board ensures that, consistent with its history and industry standing, CMC conducts its dealings
with all stakeholders with integrity and respect. It maintains a directors’ manual including a code of
ethics that extends to all staff and sets out definitive standards of behaviour. In particular, Directors
take care to comply with rules requiring disclosure of positions and occupations they have outside of
CMC that may involve a conflict of interest.
The directors have updated the existing securities trading policy to comply with prevailing legislation
that requires full disclosure by directors and senior executives both before and after buying and selling
CMC shares. All share trades by directors and senior executives are reported to the market and
Director’s trades are disclosed in the Annual Report.
The directors have established a protected disclosures (whistle blower) policy to comply with prevailing
practice to protect employees who make disclosures of information about serious wrongdoing within
the Group.
2. Board composition and performance
To ensure an effective board, there should be a balance of independence, skills, knowledge,
experience and perspectives.
The Board operates under a written charter which sets out the roles and responsibilities of the Board
and distinguishes them between the respective roles and responsibilities of the Board and the
Management.
The Company’s constitution specifies that there should be between five and seven directors. The Board
contains a mix of two independent directors and five executive and non-executive directors who are not
independent, which reflects the shareholder mix. The Board chair is an independent director.
Information about each director regarding their experience, length of service, independence, ownership
interests and meeting attendance is disclosed in the annual report.
As vacancies arise, new directors are identified by the Nominations Committee of the Board. A person
identified by the Nominations Committee can be appointed as a director by the Board during the year
but then must stand for election at the next annual meeting. A person can also be nominated by
shareholders and stand for election as a director at an annual meeting. The terms of appointment of
each newly appointed director are provided in writing.
The constitution specifies that a director cannot serve (without re-election) past the third annual meeting
following their appointment or three years, whichever is longer.
3. Board committees
The board should use committees where this will enhance its effectiveness in key areas, while still
retaining board responsibility.
Where additional detailed supervision or consideration is required, the Board establishes committees
that operate by making recommendations to the Board for final resolution. There are three standing
committees with written terms of reference.
Audit & Compliance Committee: Members of the Committee have relevant financial qualifications
and/or commercial experience. It met five times during the reporting year, with all its members present
at each meeting, bar a single absence.
45
The Committee comprises J W M Journee (Chair and independent director), A J Waugh (independent
director) and G D Gibbons (non-executive director) and it meets regularly with management, the internal
auditor and the external auditor to:
• review the adequacy of controls to identify and manage areas of potential risk and to safeguard
the assets of the Group
• maintain the independence of the external auditor and review the external audit functions
generally
• evaluate the processes to ensure that financial records and accounting policies are properly
maintained in accordance with statutory requirements and financial information provided to
shareholders and the Board is accurate and reliable.
Management is delegated the responsibility for developing, maintaining and enforcing the system of
internal controls. The same basic set of controls is applied across the Group. Monthly reports from
each dealership form a key element of the financial control mechanism. An internal auditor works in
conjunction with the external auditor to complete a review of all dealerships every year to ensure
maintenance of the standard of accounting practices and for compliance with the internal policies and
procedures. The internal auditor regularly reports to the Committee.
Remuneration Committee: A J Waugh (Chair) and G D Gibbons make up this Committee, the
purpose of which is to ensure the directors and senior executives are fairly and reasonably rewarded
for their individual contributions. The Committee meets at least three times during the reporting year.
The Company’s policy is to review remuneration levels for directors and senior staff every two years.
Directors’ fees were last reviewed in 2021. Director and management remuneration is disclosed in the
Annual Report. The Company has no equity-based remuneration plan and does not require its directors
to purchase or hold CMC shares.
Nominations Committee: This Committee has the task of identifying potential directors with skills that
are complementary to the needs of the Company and the Board. All Directors serve on this Committee.
The Committee utilises a skills matrix to determine ‘best fit and skill set’ to ensure the Company retains
the cross-section of abilities required for a balanced board. The Company does not currently have a
formal written diversity policy.
4. Reporting and disclosure
The board should demand integrity in financial and non-financial reporting and in the timeliness and
balance of corporate disclosures.
The Board schedules at least eight meetings each year to monitor the progress of management on
achieving the targets and objectives the Board has set. The Board usually meets in Wellington but at
least once a year it holds a meeting at a dealership in order to meet front-line staff and experience
operations at first hand. Additional ad hoc meetings are held when necessary, sometimes by telephone
conference. During the reporting period, the Board held 11 meetings through a mix of physical
attendance, telephone and video conference.
The Board of Directors issues three reports annually - a Half Year Report, a Preliminary Result and an
Annual Report - to provide shareholders with the information they need to monitor their investment in
the Company. These reports are designed to deliver that information in a clear and concise manner.
The reports are mailed to all shareholders and are available for download from CMC’s website
(www.colmotor.co.nz). Shareholders may register to receive the interim and preliminary reports
electronically. In the reporting period, CMC also made five additional disclosures to shareholders and
on NZX in relation to guidance, the appointment of a director and the election of a new Chair.
A condition of listing is that the Company complies with the Listing Rules issued by NZX. The rules
include the requirement to continuously disclose market sensitive information. The market acts in the
position of all current and potential shareholders and disclosure via the NZX is generally considered
adequate notification to all. However, CMC also has a policy of communicating directly with its
shareholders whenever practical.
5. Remuneration
The remuneration of directors and executives should be transparent, fair and reasonable.
As stated above, remuneration of directors and senior executives is considered by the Remuneration
Committee of the Board. During its assessments, the Committee generally refers to independent
survey reports to provide suitable market-related benchmarks. The actual amounts paid to directors
are disclosed in the Company’s Annual R
eports, including full details for executive directors.
Remuneration of other staff is also disclosed in the $10,000 bands specified in company disclosure
legislation.
The packages of senior staff are made up of fixed and variable components. The variable portions
include only short-term incentives. There are no long-term incentives or share schemes in place. The
variable elements are based on dealership profit and comprise higher proportions of the total than are
seen in the general market. Participation in the financial performance provides a strong incentive for
success. The Group has a proud record of staff retention, particularly at senior levels.
46
6. Risk management
Directors should have a sound understanding of the material risks faced by the issuer and how to
manage them. The board should regularly verify that the issuer has appropriate processes that identify
and manage potential and material risks.
The range of tools used to mitigate risk includes elements of corporate governance outlined in this
report, the system of internal controls and management reporting and accountability. The Board
reviews the Group insurance programme annually and as needs arise and assesses which risks to
insure with the assistance of an external insurance broker.
The Audit & Compliance Committee has particular responsibility for internal audit on which it receives
regular reports from the internal auditor. Management provides the Committee with an annual internal
management and regulatory compliance summary report.
During the annual strategic planning review (and periodically throughout the year), the Board and
Management review the ‘whole of business’ risk matrix which has captured the short and long-term
risks for the Group.
Health & Safety: CMC is committed to providing healthy and safe environments for all its customers,
employees, contractors and other visitors to its facilities. A comprehensive group-wide workplace safety
management programme is operated, with a Health & Safety Committee active at each subsidiary. The
Group Health and Safety Manager maintains and is continually improving CMC’s workplace health and
safety systems that are based on a comprehensive policy and procedures manual and are subject to
independent external audits. The Board receives regular detailed reports, considers health and safety
issues at each of its meetings and experiences first-hand the practicalities of maintaining a healthy and
safe workplace during its regular dealership visits.
7. Auditors
The board should ensure the quality and independence of the external audit process.
The role of the external auditor is to report to shareholders on the truth and fairness of the financial
statements prepared by management, authorised by the Board and included in the Annual Report.
The audit partner and the Chair of the Audit & Compliance Committee meet at least twice a year, the
auditor attends Committee meetings at least three times a year and the audit partner attends the
Company’s annual meetings. The scope of discussions is not limited but includes issues identified
during audits, audit planning and staffing and the extent of non-audit work by the audit firm. The lead
audit partner is changed periodically to provide a fresh perspective and to ensure greater
independence. Fees paid for audit and any non-audit work (such as taxation advice) are disclosed in
the Annual Report.
8. Shareholder rights and relations
The board should respect the rights of shareholders and foster constructive relationships with
shareholders that encourage them to engage with the issuer.
The Board acts in a stewardship role on behalf of all shareholders. It approves the strategic direction
of the Group, oversees the management of its capital resources, monitors its performance and
compliance, ensures its assets are safeguarded and its workplaces are safe.
Shareholders meet in person at annual meetings to:
• consider the Company’s financial performance and financial position
• elect or re-elect directors
• record the on-going appointment of the external auditor and to authorise the audit remuneration
• set the maximum level of director remuneration following reviews in alternate years. The actual
amount paid to each director is disclosed in Annual Reports.
The shareholders adopted the current constitution in 2004, which specifies the administration of the
Company and the relationship with shareholders. Copies of the constitution are available from the
Company or can be downloaded from the New Zealand Companies Office website. The requirements
of the Listing Rules are incorporated by reference into the constitution.
CMC maintains a website through which shareholders and interested stakeholders can communicate
with the Company and access financial and operational information. Computershare Investor Services
Limited maintains the register of shareholders.
47
Disclosures as required by the Companies Act 1993
(a) Director profiles and interests
In relation to sections 140 and 211(1)(e) of the Act, no director has declared any interest in a related party
transaction with the Company during the year. The Company has received the following general
disclosures of interest pursuant to section 140(2) of the Act that remain in place at the date of this report:
Ashley James Waugh, BBS
Te Awamutu
Ashley has experience in the dairy industry in New Zealand and Australia, with senior roles with the NZ
Dairy Board (now Fonterra) and as Chief Executive of National Foods Australia. Early in his career,
Ashley was marketing manager of Ford in New Zealand and Ford Lio Ho in Taiwan. He is currently a
director of Seeka Limited and chair of its Audit Committee. Ashley became a director in November
2015.
Graeme Durrad Gibbons, BCom, CA
Lower Hutt
After gaining a commerce degree at Otago University, Graeme began his career with Ford New Zealand
and then joined the CMC Group in 1984. He took up the role of Chief Executive in 1990 and became a
director of the Company in 1995. Graeme retired as Chief Executive on 30 September 2021.
He was previously a director of Motor Trade Finances Limited and chair of its Audit Committee.
Matthew James Newman, BA
Auckland
Until his retirement from the position on 30 June 2022, Matthew was the Chief Executive Officer of the
Group’s largest car dealership, South Auckland Motors (Ford and Mazda) and of Southern Autos –
Manukau (Suzuki, Citroen, Peugeot and Isuzu). He joined the Group in 1986, having previously worked
for Ford New Zealand and became Dealer Principal of South Auckland Motors in 1991. Matthew is a
past Chair of the Ford Dealer Council and also of Counties Manukau Rugby Union. Matthew became
a director in November 2013 and he will be retiring from the Board at the conclusion of the annual
meeting in November.
Stuart Barnes Gibbons
Lower Hutt
Stuart joined the Group in 1982 as an apprentice technician in Morrinsville. He was appointed Chief
Executive / Dealer Principal of Stevens Motors, Lower Hutt in 2002 and held the position until Stevens
Motors was merged with Capital City Motors on 1 July 2020. Stuart managed the property project for
the Lower Hutt hub facility up to its completion. In July 2022, he then took up the Group Office role of
Group Manager: Strategic Development. Stuart is a past Chair of the Ford Dealer Council. He became
a director in July 2014.
John William Michael Journee, BCom
Auckland
John has held various senior executive positions in the retail industry in New Zealand and Australia,
including with Noel Leeming and The Warehouse. He is currently a director of The Warehouse Group
Limited, Themarket.com Limited, Farmlands Co-operative Society Limited and West Auckland Trust
Services Limited and is a member of the Quantiful Limited Advisory Board. John became a director in
December 2018.
Gillian Durrad Watson, BA
Auckland
Gillian has a business background in the real estate industry and has worked in production management
in the television industry. She is a significant shareholder who has had a life-long focus and interest in the
Company and in September 2021 became CMC’s first female Director.
John Ormond Hutchinson
Christchurch
John was appointed as a director with effect from 1 September 2022. He is currently the Chief Executive
and Dealer Principal of Team Hutchinson Ford in Christchurch, a role he took over in September 2006.
He joined Team Hutchinson in 1994 in vehicle sales after working in the UK at Credit Suisse First Boston
and running his own business in Christchurch. John is a current member and past president of the Ford
Dealer Council.
48
(b) Remuneration of directors
Remuneration and all other benefits received by the directors who held office during the year ended 30
June 2022 are disclosed pursuant to section 211(1)(f) of the Act as follows:
Directors’ fees
2022
$
Total remuneration
2022
$
Total remuneration
2021
$
A J Waugh (Chair) 84,257 84,257 59,950
J P Gibbons 54,317 331,150 114,131
G D Gibbons 44,625 330,412 1,224,285
S B Gibbons - 185,650 186,931
M J Newman - 845,572 872,683
J W M Journee 62,766 62,766 54,500
G D Watson 49,583 49,583 -
A J Waugh was elected Chair of the Board in November 2021 and has received additional fees
commensurate with that position from that date. Remuneration for the Chair, additional to directors’ fees,
includes the provision of a motor vehicle.
J W M Journee was elected Chair of the Audit & Compliance Committee in November 2021 and has
received additional fees commensurate with that position from that date.
Executive Directors do not receive directors’ fees for acting as a director of the Company or of any
subsidiary. Executive Directors acting in their capacity as employees of the Company or of a subsidiary
received total remuneration including salary, incentives, superannuation contributions, use of a motor
vehicle and other benefits in the year ended 30 June 2022 as disclosed above. No other employee of the
Company or of any Group subsidiary retains or receives any remuneration or other benefits as a director.
The remuneration package of the retiring Group Chief Executive, G D Gibbons (who is also a director),
has in the year to 30 June 2022 a fixed component (including salary, motor vehicle and superannuation
contributions) of $330,412 (2021: $415,134) and an annual short term incentive component of $Nil (2021:
$809,151) based on the current year’s trading performance. There are no long term incentives or share
schemes in place.
Dealer Principals/Chief Executive Officers of subsidiary companies receive a profit incentive in their
remuneration based on their dealership’s profit. The remuneration received by M J Newman as an
executive, as disclosed above, is for the twelve months to 30 June 2022 and includes a short term profit
incentive component of $574,822 (2021: $606,552). Similarly, the remuneration of S B Gibbons as an
executive is shown for the twelve months to 30 June 2022 and has no short term profit component (2021:
$Nil).
In accordance with clause 28.4 of its constitution, the Company may provide for director retirement
benefits. There was no provision held at 30 June 2022 (2021: $268,500). Directors appointed after 1 May
2004 are not eligible to receive a retirement allowance unless authorised by shareholder resolution. The
provision at June 2021 was paid to J P Gibbons following his retirement from the Board after 29 years as
a director, including the past 10 years as Chair. There are no further payments to be made under clause
28.4 of the constitution.
As permitted by clause 29.4 of the Company’s constitution, an insurance policy is in place in relation to
directors and officers liability. The policy ensures that, generally, directors will incur no monetary loss as
a result of actions they undertake as directors. Certain actions are specifically excluded, such as incurring
penalties and fines that may be imposed in respect of breaches of the law.
(c) Use of company information by directors
During the year the Board did not receive any requests from directors to use Company information
provided to them in their capacity as an officer or employee that would not otherwise have been available
to them.
49
(d) Share dealings by directors
Directors have disclosed under Section 148(2) of the Act the following acquisitions of a relevant interest
in shares in the Company between 1 July 2021 and 31 August 2022.
Director
Number of shares
acquired
Date of transaction
Price per
share
Type of interest
A J Waugh 1,374 24 August 2021 $9.85 Beneficial
A J Waugh 14 24 August 2021 $9.97 Beneficial
A J Waugh 5 25 August 2021 $10.10 Beneficial
M J Newman 500 21 February 2022 $10.85 Beneficial
M J Newman 1,000 22 February 2022 $10.95 Beneficial
Directors disclosed no other transactions in the shares of the Company during the period.
(e) Composition of the Board
At the reporting date, five Directors were male and one female. Of the 17 Group officers, there was one
female officer and the rest were male (2021: 6 Directors - male, 17 officers – 16 male and 1 female).
(f) Remuneration of employees
During the year to 30 June 2022 the number of employees in the Group, not being directors of The
Colonial Motor Company Limited
, who received remuneration (including salary, incentives,
superannuation contributions, use of a motor vehicle and other benefits) which exceeded $100,000 were
as follows:
Remuneration
Number of
employees
Remuneration
Number of
employees
$ 2022 2021 $ 2022 2021
100,001 - 110,000 39 45 330,001 - 340,000 1 -
110,001 - 120,000 25 32 340.001 - 350,000 1 -
120,001 - 130,000 26 24 350,001 - 360,000 1 -
130,001 - 140,000 24 20 360,001 - 370,000 2 -
140,001 - 150,000 15 11 370,001 - 380,000 1 1
150,001 - 160,000 11 9 380,001 - 390,000 - 1
160,001 - 170,000 13 8 430,001 - 440,000 1 2
170,001 - 180,000 11 8 440,001 - 450,000 - 1
180,001 - 190,000 6 6 450,001 - 460,000 2 -
190,001 - 200,000 6 7 470,001 - 480,000 - 1
200,001 - 210,000 6 5 510,001 - 520,000 1 -
210,001 - 220,000 3 1 530,001 - 540,000 1 -
220,001 - 230,000 8 2 620,001 - 630,000 1 1
230,001 - 240,000 2 3 670,001 - 680,000 1 -
240,001 - 250,000 2 2 680,001 - 690,000 - 1
250,001 - 260,000 7 2 690,001 - 700,000 - 1
260,001 - 270,000 1 5 750,001 - 760,000 1 -
270,001 - 280,000 1 - 800,001 - 810,000 1 -
280,001 - 290,000 2 - 870,001 - 880,000 - 1
290,001 - 300,000 1 2 1,270,001 - 1,280,000 1 1
300,001 - 310,000 1 2 1,470,001 - 1,480,000 1 -
320,001 - 330,000 1 4
Total 228 209
Total full time equivalent employees 1,022 988
The remuneration package of the Group Chief Executive, A P Gibbons, in the year to 30 June 2022 w as
$757,446 comprising
a fixed component (including salary, motor vehicle and superannuation
contributions) of $296,614 and an annual short term incentive component of $460,832 based on the
current year’s trading performance.
50
Disclosures as at 30 June 2022 as required by the New Zealand Stock Exchange
Listing Rules
(a) Director independence
The following directors were Independent Directors at the reporting date:
A J Waugh
J W M Journee
The following directors were not Independent Directors at the reporting date:
G D Gibbons
M J Newman
S B Gibbons
G D Watson
(b) Directors’ relevant interests at 30 June 2022
Shares in which the
director has a beneficial
interest solely or jointly
Shares in which the
director has a non-
beneficial interest
Shares held by
associated person of the
director
2022 2021 2022 2021 2022 2021
G D Gibbons 670,656 670,656 2,474,467 2,474,467 184,520 184,520
S B Gibbons 1,975,299 1,975,299 650,435 650,435 6,151 6,151
M J Newman 31,500 30,000 - - - -
A J Waugh 9,758 8,365 - - 376 376
J W M Journee 2,613 2,613 - - - -
G D Watson 614,069 n/a 354,810 n/a 105,000 n/a
(c) Substantial Product Holders
As required by section 293 of the Financial Markets Conduct Act 2013, the Substantial Product Holders
as at 31 August 2022 (from whom a notice under the Act had been received and the date of each such
notice) were as follows:
Date Shares %
J P Gibbons 21 October 2020 2,079,599 6.36
S B Gibbons 11 March 2021 2,625,734 8.03
G D Gibbons 22 March 2021 3,145,123 9.62
Issued and fully paid capital as at 30 June 2022 was made up of 32,694,632 ordinary shares. The
above disclosures include voting securities arising by reason of joint holdings, powers of attorney and
directorships as specifically required by section 280(1) of the Financial Markets Conduct Act 2013. No
shares have been counted more than once in the determination of Substantial Product Holders.
A number of shares identified under J P Gibbons are also jointly held or have trustees in common with
D M Gibbons and P L & L C Bennett.
A number of shares identified under S B Gibbons are also jointly held or have trustees in common with
A D Gibbons & L B Rogerson, J H Smith & A F Peake and M A Gibbons & A K Cook.
A number of shares identified under G D Gibbons are also jointly held or have trustees in common with
A K Gibbons & S D Wood, S D & D M Wood, R D Gibbons & S D Wood, A D & G V Beaumont, D D &
B W Harrison and G D & I W Watson.
51
(d) Distribution of shareholders and shareholdings
This distribution information reflects the position as at 31 August 2022.
Individual shareholding Number of shareholders Number of shares
Number % Number %
1 - 999 349 21.3 149,998 0.4
1,000 - 9,999 974 59.4 3,133,565 9.6
10,000 - 99,999 253 15.4 6,761,855 20.7
100,000 - 999,999 61 3.8 19,618,892 60.0
1,000,000 + 2 0.1 3,030,322 9.3
Total 1639 100.0 32,694,632 100.0
(e) Five year summary of shareholder return on investment - 30 June year ended
Year
Share
price Dividends paid - cps
Gross
dividend
Change
in share
Total
gross
Gross
shareholder
at 30
June
Date Net Gross yield
%
price
cps
return
cps
return
%
2022 $9.51 28/03/22 15.0 76.4 8.3 31.0 107.4 11.7
04/10/21 40.0
2021 $9.20 29/03/21 15.0 65.3 9.5 235.0 300.3 43.8
05/10/20 32.0
2020
(1)
$6.85 20/04/20 - - 4.7 (195.0) (153.3) (17.4)
21/10/19 30.0 41.7
2019 $8.80 15/04/19 15.0 69.4 8.7 80.0 150.4 18.8
15/10/18 35.0
2018 $8.00 16/04/18 15.0 63.9 8.5 50.0 113.9 15.2
17/10/17 31.0
Note: Yields are calculated on the share price at the beginning of each year. The share price at 30 June
2017 was $7.50.
(1)
Due to the effects on the Group’s business of the Covid-19 nationwide level 4 lockdown, the interim dividend of 15.0 cps, that
had been declared to be paid on 20 April 2020, was cancelled.
52
Fifty largest shareholdings as at 31 August 2022
Shares %
AD & SB Gibbons & LB Rogerson 1,742,228 5.3
Florence Theodosia Gibbons 1,288,094 3.9
JP & DM Gibbons & PL Bennett 834,556 2.6
Graeme Durrad Gibbons 670,656 2.1
PL & LC Bennett & JP Gibbons 634,030 1.9
Diana Durrad Harrison 630,078 1.9
BR & CM Gibbons & PL Bennett 627,208 1.9
Gillian Durrad Watson 614,069 1.9
Robert Durrad Gibbons 613,930 1.9
Sara Durrad Wood 613,369 1.9
Alison Durrad Beaumont 603,454 1.8
RJ Field & AJ Palmer 600,000 1.8
AD & GV Beaumont & GD Gibbons 585,215 1.8
MI & C Louisson & RM Carruthers 563,777 1.7
JP & DM Gibbons & PL Bennett 492,055 1.5
MA Gibbons, AK Cook & SB Gibbons 474,348 1.5
GD & AK Gibbons & SD Wood 470,012 1.4
JG, J & CG Harrison 458,317 1.4
Citibank Nominees (New Zealand) Limited 450,434 1.4
May Alice Gibbons 355,196 1.1
DD & BW Harrison & GD Gibbons 354,810 1.1
GD & IW Watson & GD Gibbons 354,810 1.1
RD Gibbons, SD Wood & GD Gibbons 354,810 1.1
SD & DM Wood & GD Gibbons 354,810 1.1
Hart Capital Partners Limited 347,863 1.0
CG & JG Harrison 335,244 1.0
KS, SKE & J Bale 324,244 1.0
E A Romans 323,482 1.0
RB & JG Tait & IJ Craig 305,006 0.9
Rebecca Hope Wilson 300,478 0.9
Leanne Barnes Rogerson 281,410 0.9
SH Majors, RH & SJ Wilson 268,556 0.8
David Grindell 252,000 0.8
K Enright & C Louisson 251,366 0.8
CM Louisson & N Tarsa 241,804 0.7
Stuart Barnes Gibbons 233,071 0.7
Pauline Lucy Bennett 223,138 0.7
MC Duurentijdt, JT van Gaal & KD Trustees Limited 215,983 0.6
Bruce Robert Gibbons 201,372 0.6
CG & AJ Harrison & JA Flygenring & P&M Trustees No 2 Limited 188,118 0.6
JH Smith, AF Peake & SB Gibbons 176,087 0.5
James Picot Gibbons 169,860 0.5
CMC Workplace Savings Scheme Trustee Limited 148,196 0.5
KS, SK & MG Bale 147,929 0.5
Helen Ailsa Louisson 140,870 0.4
Ian Forbes Michie 135,730 0.4
GH & FT Gibbons & SJ Wilson 122,413 0.4
JO & MG Young 120,835 0.4
Sally Blundell Fell 118,174 0.4
Anne Blundell Norman 118,173 0.4
Total of fifty largest shareholdings 20,431,668 62.5
Total shares on issue 32,694,632 100.0
Today the CMC Group’s core business is the operation of Ford
dealerships each holding a franchise in its own right from the Ford
Motor Company of NZ Ltd. A number of these dealerships also hold
Mazda franchises. CMC, through Southpac Trucks, is the NZ
distributor and retailer of Kenworth and DAF heavy duty trucks and in
Southland/Otago, Agricentre South retails New Holland, Case IH and
Kubota tractors and equipment.
The Colonial Motor Company originated from William Black’s
coachbuilding factory which started operations in 1859 at 89
Courtenay Place, Wellington. In 1881 it was taken over by Rouse &
Hurrell, who expanded the business with new three storied premises
calling it Rouse & Hurrell’s Empire Steam and Carriage Works. This
partnership was formed into a limited liability company in 1902 with Mr
Edward Wade Petherick the first Secretary of the Company. The Ford
Motor Car Agency was taken up in 1908 and in August 1911 a new
name “The Colonial Motor Company Limited” was registered.
On Ford Canada’s recommendation a dominant shareholding and
control was acquired by Mr Charles Corden Larmour and the sale of
this majority holding and control to Mr Hope Gibbons and his family
interests was concluded in April 1918 after negotiations in 1916. At
that time there were 17 Authorised Ford Dealers in New Zealand of
which 10 were in the South Island. In 1919 the Company restructured
with a new memorandum and articles but the 1911 name was retained
and remains the same today. 2018 marked the company’s 100th
Annual Report.
The nine storied building at 89 Courtenay Place, designed by architect
J M Dawson to Ford plans, opened as the tallest Wellington
construction in 1922. It was the first motor vehicle assembly plant in
New Zealand - vehicles starting in boxes at the top and driving out
completed at the bottom. The Company later built assembly plants at
Fox Street, Parnell, Auckland and Sophia Street, Timaru. This was the
age of the Model T with Ford market share reaching a peak of 27% in
1926. The ‘CMC’ Building was sold in 2005.
In 1936, Ford Motor Company of New Zealand Limited established an
assembly plant at Seaview, Lower Hutt, and took over the distribution
of Ford products in New Zealand. CMC then concentrated on the retail
side of the business, operating the retail garages it then owned. The
1930's and 1940's were a time of survival with the depression, excess
stock of new product, and then no new vehicles available during the
war years and petrol rationing until 1950. Service became the key to
remaining in business.
Shortly after the end of the war the supply of new vehicles was
resumed and the 30 years up to 1980 saw the Group consolidate. The
Dealer organisation that developed proved to be one of the best retail
motor groups in New Zealand. Over this period nearly every
Dealership was either rebuilt, fully refurbished or relocated and new
Dealerships were opened in East, West and South Auckland to cater
for Auckland growth.
CMC was listed on the NZ Stock Exchange in May 1962.
For the 50 years up to 1987, New Zealand had import licensing, local
assembly of vehicles and heavy additional sales taxes to control
overseas funds. The new vehicle industry under this regime peaked in
1973 and again in 1984 at 123,000 units. The dismantling of controls
and the arrival of second hand imports from Japan saw the industry
fall to just 66,500 new vehicles in 1992. It wasn’t until 2014, 30 years
later, that the new vehicle industry again reached the level seen in
1984. 2015, 2016, 2017 and 2018 all saw record industry sales.
The late 1980’s and all through the 1990’s was a period of change and
adaptation. Over a decade, most smaller Ford dealerships either
closed down or merged with their neighbours. This resulted in fewer
but larger Ford dealerships. CMC closed or sold its smaller
dealerships and acquired others to expand its city and provincial
locations. Nelson was acquired during this period. Compounding the
changes were the international decisions of Ford Motor Company to
sell its tractor and heavy truck businesses which resulted in Ford in NZ
ceasing to import both products.
Most of the CMC dealership tractor departments were closed, with the
exception of Southland. This business has since grown to become
Agricentre South Ltd, retailing New Holland & Kubota tractors in
Southland and Case IH tractors in Southland / Otago with locations in
Invercargill, Gore, Milton, Cromwell and Ranfurly.
In 1994 CMC acquired a major interest in Southpac Trucks, the NZ
distributor for Kenworth and Foden (since retired) and more recently,
DAF, heavy duty trucks which are all part of the USA based PACCAR
organisation. Southpac Trucks has since grown into a major player in
the NZ heavy truck industry with locations in Manukau City, Hamilton,
Rotorua, New Plymouth, Palmerston North and Christchurch together
with a nationwide network of independent parts & service dealers.
Guinness Peat Group plc (GPG) made a takeover offer for CMC in
October 1995. Among the sellers who enabled GPG to acquire 33.9%
were some original Gibbons Family shareholders. As part of a plan to
maximise value to shareholders, Directors resolved to rationalise the
Company's non-dealership property holdings, repay the surplus funds
to shareholders and focus the Company on its core motor trade
activities.
In June 1997, GPG sold its shares to the MBM Group of Malaysia. Over
the following years, MBM sold down its holding in CMC, with many of
the shares acquired by members of the Gibbons family. MBM sold its
final block of 24.9% to a large number of individuals in 2003, resulting
in the addition of 300 shareholders to CMC.
In 1999, CMC's Auckland Dealerships joined with Ford Motor Company
and three other Ford dealerships to form Auckland Auto Collection
Limited (AACL). This move represented the biggest change in the Ford
franchise arrangements in New Zealand for over 60 years. During
1999, this new business acquired the Mazda Dealerships in Auckland
and Mazda Motors joined CMC and Ford as a shareholder. From 2002,
the business operated as three Ford and Mazda dealerships - North
Harbour, John Andrew and South Auckland. CMC sold its shareholding
back to AACL in May 2005 and, in return, acquired the South Auckland
Dealership.
On 16 June 2003, Ford Motor Company celebrated its centennial and
the production of the original Model A Fordmobile with CMC and its
forebears having been actively involved with Ford for 95 of those 100
years. In celebration of this long relationship, a history of the
Company's operations and activities, "Ford Ahead", was written and
published by Roger Gardner.
During the 2000’s CMC also acquired the Mazda franchises in
Invercargill, Dunedin, Timaru, Wellington, Lower Hutt and Masterton.
These were run as dual dealerships with the existing Ford dealerships.
The policy of adding Mazda to Ford dealerships ended when Ford USA
sold its interest in Mazda Japan in 2009.
It has been part of the Company's philosophy and success to own
property sites from which its retail subsidiary companies operate.
In 2014 CMC acquired Jeff Gray BMW & MINI with locations in
We
llington, Christchurch, Palmerston North and Hastings. The
business was subsequently sold in November 2016.
In recent years CMC has increased its franchise representation in a
number of locations as separate dealerships or aligned with existing
businesses and now includes: Suzuki, Nissan, Kia, Hyundai, Isuzu
Utes, Peugeot, Citroen, Mahindra; Suzuki, Kawasaki, Yamaha & BMW
motorcycles.
Details of the Group’s current dealerships, locations and the franchises
they represent are detailed on page 9 in the report.
Greenhouse gas emissions are now driving the power source for
vehicles away from fossil fuel and the internal combustion engine to
clean sources – electricity, hydrogen, bio fuel or others yet-to-be
identified.
The current major shareholdings in CMC are individual descendants of
Hopeful & Jessie Gibbons, who collectively hold over 60% of the
Company shares. There are also many descendants of the original
1902 subscribers to the Rouse & Hurrell Carriage Building Company
Limited who remain shareholders today.
Throughout the Company's history, change has always been with us
and our ability to adapt in good times and in bad has ensured ongoing
wellbeing and prosperity. As well, it has always been recognised that
dedicated, skilled and enthusiastic people have been, and will
continue to be, the key to the Company's future.
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.