Ann: FY2021 Full Year Results Investor Presentation, page-2

I subscribe in print and digital to the excellent 'The Australian' for many reasons, including what can be detailed interviews not always found in 'AFR' and definitely not in the leftist 'The Age'.

I didn't even know of this company.

From 'The Oz' of Thursday 7 October 2021:

A three-year road map kickstarted a stellar financial year for Australia’s biggest motorcycle group helped along with a surge in new owners during the Covid-19 pandemic.

The Brisbane-based ASX-listed company Motorcycle Holdings powered to a record performance in 2020-21 with revenue and profit increases across all divisions.

And there was not a patched bikie in sight with buyers ranging from doctors, lawyers and players in the corporate world happy to pay $60,000 for a Harley-Davidson or more for a Ducati or BMW or to those people just starting on their journey forking out $3000 to $7000 for an entry level dirt or road bike.

Chief executive and major shareholder David Ahmet said the average buyer nowadays is male between 20 and 40, although there are plenty who are older.

David Ahmet, managing director MotorCycle Holdings, in the Newstead showroom.

“Like other leisure activity producers we have benefited from Covid to some degree,” he said.

“That entry level part of the market — off road bikes and entry level road bikes — have done particularly well in the last 12 months. That’s new people to the industry and that’s why volumes have picked up.

“It’s an aspirational sort of thing. Because of Covid they’re not going overseas, they weren’t going out to dinner, they weren’t going to the football or whatever and they’re looking for something to do on the weekend.

“If they’re passionate about bikes they will buy them. We sell a range of dirt bikes for the whole family. However, at this stage women make up 8 per cent of buyers and that’s an area we could improve on.”

Mr Ahmet started in the industry 32 years ago and while there have been a few bumps along the way, the company is motoring along well since it listed in 2016.

“The market came off for those three years after we listed and we had very modest growth,” he said.

“But we’ve taken a lot of steps over the last 12 to 18 months to lift profit and cost reductions were significant across the business which we did prior to Covid.”

Over 2020-21 the company’s sale of new and used motorcycles increased by 8 per cent to 22,694 units — with sales of new bikes soaring by 20 per cent.

In the same period revenue rose 19 per cent to $433.9m and net profit after tax surged 86 per cent to $28.3m revving up staff numbers to about 750 staff.

Mr Ahmet said the company was “getting similar numbers” for the start of 2021-22 to the previous financial year.

However, he said the sustained lock downs in Victoria meant dealerships had to close their doors to customers.

“But click and collect has kept us going in many places. They’re buying motorcycles over the phone and coming and picking them up — they can’t come into the dealership,” he said.

Mr Ahmet — who has 10 bikes in his garage — founded Motorcycle Holdings in 1989 and his 18.5 per cent stake in the company is worth around $33m.

The company operates 41 retail locations in Queensland, NSW, Victoria and the ACT.

Their most successful dealership is Gold Coast Harley-Davidson at Nerang which Mr Ahmet said was “the right area with the right demographic”.

Originally from Bundaberg Mr Ahmet developed a love for motorcycles as a child and trained as a mechanic.

“That’s how I got into the industry to begin with. I was an enthusiast when I was young and I wanted to get into business and I thought why don’t I combine the two and that’s essentially how I got started. Once I got in there I thought `yes’ this is it,” he said.

“I started as a salesman on the floor at Moorooka which is still going great and that’s where I worked for 13 years as the dealership principal.”

MotorCycle Holdings reported strong growth in 2020-21.

When Mr Ahmet’s original partner sold out in 2011, private equity firm Archer Capital took a stake in Motorcycle Holdings and cashed out when the company listed on disallowed in 2016.

Since then the company has expanded the business by adding new product ranges and brands to existing sites without increasing the cost base was delivering sustainable growth and profit.

“Product diversification contributed strongly to our improved performance,” he said.

While Harley-Davidson dealerships continued to produce strong profit results they have added Indian Motorcycles and Polaris products such as small off road 4WD for the agricultural sector, jetskis and power tools to the product mix.

They have a strong performing servicing and repair division performed well after acquiring Cassons Pty Ltd in 2017 its motorcycle accessories business has become increasingly important.

Retail accessories and parts revenue increased 14 per cent to $86.3m while its wholesale accessories and parts external revenue rose 16 per cent to $40.4m.

For the first time its finance and insurance revenue recorded a profit and its revenue rose 6 per cent to $13.3m.

Mr Ahmet said having cleared their corporate debt they were now on the mergers and acquisitions trail and strengthen their vertical integration model by offering a service or product for every step on the way.

“We’re cashed up and ready to go and we’re looking for anything motorcycle related,” he said.

“We like Victoria and NSW but we don’t have anything in WA or South Australia and they are certainly on the radar. We have an interest in New Zealand and we might expand there.

“We import them and retail them provide the wholesale product to the dealership and the finance as well. It’s just a case of moving further up the food chain.”

Shares in Motorcycle Holdings were trading at $2.90 on Wednesday, valuing the company at almost $180m.