Mechanical Lloyd makes more profits in northern sector

Mechanical Lloyd Company Limited, a leading automobile company in Ghana yesterday disclosed that the company performed better in northern sector than the south of the country.

According to the company, the northern operations performed even better in 2010 than Accra Service Centre (ASC) achieving its best performance since the establishment of the unit in 2004.

The northern operations comprising Kumasi and Tamale branches, last year achieved 120% of its targeted whole goods sales and 143% of budgeted aftersales revenue. This has translated into a net profit before tax of GH¢277,649 – as compared with a budget figure of GH¢38,175.

The Board Chairman of the company, C.B.K Zwennes announced this at the company's Annual General Meeting in Accra. He told the shareholders that: 'For 2010 we achieved a turnover of GH¢28.46million, a healthy 28.39% increase over that of 2009.

However, this improvement was at the expense of gross profit margin, which declined from 21.06% in 2009 to 19.97% in 2010?.

Thanks to the fact that there was no massive (GH¢820,964) write-off of Land Rover parts as happened in 2009, following the company's termination of the Land Rover dealership agreement, selling, general and administrative expenses as a proportion of revenue, declined from 21.35% in 2009 to 17.07% which impacted positively on the bottom line, Mr. Zwennes explained.

After adjusting for other Income of GH¢2,106,990 (2009: GH¢1,353,215) arising mainly from fair value gain on investment property, and net finance costs of GH¢522,871 (2009: GH¢837,670) the company ended the year 2010 with a net total comprehensive income of GH¢1,454,239 which is 41.4% higher than the 2009 figure of GH¢1,020,882.

In view of this improvement in the year's performance, the directors have recommended the payment of a higher dividend from GH¢0.0045 per share in 2009 to GH¢0.006 per share for 2010, depicting an increase of 33.3%.

Touching on the performance of Ford, BMW and Massey Ferguson, the Chairman was quick to reveal that the Ford market experience improved considerably on its 2009 performance. He added that Ford achieved 20% higher sales, while the BMW achieved 95% of sales' target. The Massey Ferguson also hit 65% sales.

On after-sale services, Mr. Zwennes noted that the intensive high quality training programme that all mechanics have been made to undergo over the last couple of years was yielding good results. Improved productivity and competency he stressed have resulted in fewer job returns and the achievement of 89% of targeted throughput for Ford and 97% for BMW.

With regard to parts sales, both through the counter and workshop, BMW achieved 104% of target and Ford 109% which translated into 107% of target profit for ASC.

To crown the performance of the service side of the business, the company was awarded the 'SSA (Sub Sahara Africa) regional Largest Part Purchase Volume Dealer for 2010' by Ford Export Operations for being' the first SSA Dealer to break $1million in parts purchase.