Puzey & Payne vehicle sales up


Conrad Dube

VEHICLE unit sales through Puzey & Payne were in line with budget and up on prior year to help Tractive Power Holding (TPH) group’s three months to May 31 performance
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Managing director Graham Harnden said demand for parts and services at all business units remained firm, but depressed volumes at Barzem, restricted group turnover to a 10% increase over the second quarter.


But Barzem, Harnden said, made a significant contribution to overall third quarter results, driven by direct sales commissions, sustained margins and attention to cash management.


“Exchange gains achieved on managed foreign credit exposure, and direct commission sales from all business units, contributed to a third quarter operating profit in line with inflation,” Harnden said.


Parts stockholdings have been maintained at levels in excess of five months, upholding margins and providing some assurance of trade continuity well into the new financial year.


“Margins were substantially maintained, through replacement pricing on stockholdings, which have been rationalised in line with the current demand trends,” he said.


Control over operating costs was enhanced by increasing direct and commission sales facilitated through business units, contributing to an inflationary growth in group profit over second quarter.


“A number of pending orders on our trading units were delayed by customer uncertainties in the marketplace,” said Harnden. “However, there are positive indications of prospective growth in order volumes at all business units, with the effects thereof likely to impact on the next financial year, due to lead-times following order confirmations.”


While capital investment in all industrial sectors remained severely constrained, limiting unit sales of machinery and equipment, ageing equipment in the market continued to generate significant parts and service demand for Tractive franchise products at all business units.


“This sustained business activity in our core product lines has also been complemented by improved demand for our Hyster lift trucks through Barzem. In addition, inconsistent power supply has prompted an upsurge in enquiries and orders for generator sets, supplied through both Barzem (Caterpillar) and Farmec (Massey Ferguson),” said Harnden. Earnings per share for the period under review remained much in line with inflationaryforecasts.


Debtor levels have been tightly controlled at all business units, as evidenced by the improved position in-group cash-flow over the financial year to-date.


Harnden said contributions from all operations met management forecasts, and the group more importantly achieved a net cash inflow over the period, despite dividend payments and minimised foreign creditors.


Analysts said the success of the former Astra group companies, Astra Industries, Cairns Holdings and Tractive Power Holdings had inspired other companies to consider unbundling as a way to unlock shareholder value.

Astra group companies’ sum total at $815 on Wednesday this week was 2975% above the August 17 2001 sum total of $26,50.