Pressure on Jetcon’s sales easing

The current year that ends December, is proving to be a tough one for used car dealer Jetcon Corporation with falling revenues and profit for the first half of the year.
In its recent report on second-quarter results, management reported another challenging period following a sharp fall in sales and profit for the first quarter. Revenues fell 26 percent and profits by 75 percent and for the half-year, revenues declined by 23 percent and profit by 70 percent.
The first half performance reverses three years of solid growth for the company. “We are pleased to report that we are now seeing positive developments since June, with sales up 10 percent ahead of 2018, in both June and July. Orders for August, suggest that we will enjoy a much better sales than in 2018. Sales in August last year were below the historical pattern. Our projection calls for higher sales than 2018 in the second half of the financial year,” the company’s management stated in the report accompanying the results.
Revenues fell to $221 million from $300 million in the June 2018 quarter with a fall in gross margin, from 18 percent to 16.5 percent and a decline in pretax profit, to $9 million versus $35 million in 2018. Earnings per share ended at 1.5 cents versus 6 cents in 2018. Year to date, revenues declined to $467 million from $607 million in the similar period in 2018. Gross profit margin declined from 20 percent to 17 percent. Pretax profit decreased from $81 million to $24 million. Earnings per share ended the period at 4 cents versus 14 cents in 2018.
“We reduced prices in some areas to move inventories in the first half of the year and this negatively affected our gross margin. We expect that the discounting will ease as the year progresses,” the management report stated.
Jetcon shares traded on the Junior Market of the Stock Exchange at a 52 weeks’ low of $1.58 on Friday but bounced to $1.70 on Monday.
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