Mon | Dec 11, 2017

Another strong quarter for Jetcon

Published:Friday | August 11, 2017 | 12:03 AMNeville Graham

Auto dealer Jetcon Corporation Limited posted another quarter of growth in revenues and profit, exceeding even its own expectations, according to Managing Director Andrew Jackson.

For the quarter ending June, revenue grew 52 per cent to $292 million, while profit doubled to nearly $43 million.

"We're doing very well and, in fact, it is better than expected," Jackson said.

Asked whether he believes the company can continue to exceed expectations, the Jetcon founder suggested that even if the company missed future targets, it would still be from a strong base.

"It's better to be wrong on this side of the fence than on the other side," he said.

Jackson says Jetcon has not been doing anything special that explains the performance. Instead, he linked it to a combination of external factors all leading to car buyers feeling better about their prospects.

"The market just seems to be working with us, for example, interest rates are low and the banks are very eager to lend for cars. We also have a fairly stable Japanese yen; it is not fluctuating like it used to," Jackson said.

The pre-owned car trader also feels that the Government's tax relief package, which saw full roll-out at the beginning of the year, is positively affecting sales.

"People now have more disposable income. The fact is that $18,000 more in a person's pocket can mean they are better able to manage the monthly payments for cars," Jackson said.

Over six months, Jetcon made $80 million in profit, or 141 per cent higher than the 2016 period, partly due to a $4-million corporate tax bill that Jetcon has been relieved of for a period as a junior market company. Sales vaulted 62 per cent to $548 million.

Jetcon, which went public in the first quarter of last year, executed a three-for-one stock split in June to keep its shares affordable and accessible. The stock was trading just shy of $17 ahead of the split. It now trades at around $5.50.

Jetcon is reporting that inventory of motor vehicles and parts increased over the span of a year to $336 million in the June quarter. It noted that this was a deliberate strategy to increase choice for customers in order to grow sales.

Jackson noted that it has resulted in a build-up of cars on the lot, but said it is meant to keep pace with summer demand.

"We're probably a little overstocked right now and we need to fix that, but generally speaking, we need to have 3-4 times the monthly demand in stock to meet the need for choice on the part of our customers," he said.

Meantime, Jetcon is close to signing off on a deal to secure another location for expansion. Jackson said once the property is secured, the expansion plans should come to fruition by year end.

neville.graham@gleanerjm.com