Stern Groep N.V. recently announced excellent results for the first half of 2016. The listed automotive group realised a 9.0% increase in revenue to € 562.4 million. Dealer Group Stern realised an increase of 8.8% and SternLease realised an increase of 19.6%. The Group also booked a large increase in profit, with the operating result rising to € 8.8 million (H1 2015: € 6.5 million) and the result after tax amounting to € 5.2 million (H1 2015: € 3.4 million), an increase of 52%. Earnings per share also rose by 53% to € 0.92 (H1 2015: € 0.60).
Dealer Group Stern
Dealer Group Stern virtually maintained its market share for new passenger cars at 5.6% (H1 2015: 5.7%). The slight decline in the number of new passenger car sales was partly offset by a 2.0% increase in the average sale price. The market for new light commercial vehicles showed a clear increase of 25.5% in H1 2016 to 40,450 units (H1 2015: 32,226 units). Mercedes-Benz (+ 40%), Ford (+ 44%) and Renault (+36%) outperformed the market as a whole. Against this national background, Dealer Group Stern sold 32.5% more new light commercial vehicles, thus outperforming the national market. Dealer Group Stern’s market share for new light commercial vehicles in H1 2016 accordingly came to 8.4% (H1 2015: 8.0%).
Stern Financial Services
The number of lease contracts at SternLease rose by 5.5% in H1 2016 to 9,538 (year-end 2015: 9,045 contracts). Compared to 30 June 2015 (when there were 7,993 lease contracts), this is an increase of 19.3%. Growth was slightly hindered in H1 2016 due to the bankruptcy of a relatively large customer. The losses related to this have been recognised directly in H1 2016. The operating profit of Stern Financial Services came to € 4.4 million, an increase of € 0.9 million (25.2%) compared to H1 2015.
Stern Mobility Services
The operating result of Stern Mobility Services (SternSchade, SternPoint, SternTec, Mango Mobility and SternRent) was on balance lower in H1 2016 than in H1 2015. Only SternTec realised a strong improvement in its result due to the increase in the market for light commercial vehicles and a new product line introduced in 2015. The proposed integration of SternRent, SternSchade and SternPoint is proceeding according to plan, but will only lead to positive results over time. Revenue at Mango Mobility is growing strongly, however a positive result is not expected here until 2017.
Outlook clearly more favourable
Despite the as yet somewhat disappointing results at Stern Mobility Services, the results show a clear improvement compared to previous forecasts. The profit after tax in H1 2016 is encouraging, as is the development of the order book for a number of car brands and at SternLease. Furthermore, we expect to see another rush to register and deliver plug-in hybrids at the end of 2016, since business drivers purchasing (or registering) plug-in hybrids after 1 January 2017 will no longer be able to benefit from the 60-month 15% additional tax liability.
Finally, new agreements were reached with the banks in H1 2015 regarding the financing of the Group’s working capital. The new agreements with the banks are similar to those in the previous arrangement. The interest conditions are however clearly more favourable and the ICR covenant has been reduced. New agreements have also been concluded with Mercedes-Benz Financial Services (MBFS), whereby the finance limit has been raised from € 127 million to € 145 million. MBFS finances new cars for Stern Auto, but also for SternRent and the entire Stern Group inventory of used cars.
