The Colonial Motor Company Limited Analysis

Overview

CMO originated in 1859 from a coach-building operation at 89 Courtenay Place Wellington. In 1881 it merged into Rouse & Hurrell, a partnership that formed into a limited liability company in 1902. The Ford Motor Company agency for New Zealand was acquired in 1908, and in 1911 the company name was changed to The Colonial Motor Company Ltd. In 1919 a new company was incorporated introducing additional capital from Hopeful Gibbons to fund expansion. In 1936 the Ford Motor Company took over the assembly and distribution side of the business, enabling CMO to focus on the retail dealership operations.

Today CMO owns and operates twelve Ford Dealerships with each holding a franchise in its own right from the Ford Motor Company of New Zealand Ltd. Seven of these Dealerships also have Mazda franchises. All Dealerships sell new and used vehicles as well as providing parts and service. Recent diversification has introduced other brands and motorcycles to the mix of products. The Company is involved in the distribution and retailing of Kenworth and DAF heavy duty trucks, and in the retailing of New Holland, Kubota and Case IH tractors and equipment in Southland.

Descendants of the subscribers of the original 1902 company remain shareholders, and the current major shareholders in CMO are descendants of Hopeful Gibbons. In 1995 Guinness Peat Group secured a 34% shareholding which it sold two years later to MBM Resources of Malaysia. MBM gradually sold down its holding and in 2003 sold its remaining shareholding on market, introducing over 300 new shareholders.

In addition to operating the car, truck and tractor Dealerships, CMO's philosophy is to own the properties from which its subsidiaries operate. Land and buildings continue to make up a significant proportion of CMO's assets.

Performance

The following information was extracted from The Colonial Motor Company Limited's Half Year Results, released on 19 September 2025:

The Colonial Motor Company Limited has released its results for the six months ended 31 December 2024. The Company recorded a trading profit after tax of $6.9m, down 23.8% on the comparative period.

Together with the result announcement, the Board declared an unchanged, fully imputed, interim dividend of 15 cents per share to be paid on 31 March.

Chair, Ash Waugh, confirmed this had been a better result than anticipated at the time of the 2024 AGM in November, when the market and outlook appeared bleak. The second half of 2024 had largely lived up to that expectation but a strong December result, assisted by continued prudent cost management, had seen the six months end on a more positive note.

The market remained subdued, relative to the trading conditions enjoyed over the past few years, with recessionary impacts affecting demand for new light vehicles and now heavy trucks. He pointed out that in terms of light vehicles, continued excess stock in the market was maintaining the challenging trading environment. The refreshed focus Management had placed on used vehicles within the dealerships, together with the ongoing cost management, had been contributors to the better than expected result.