Tag Archives: Business

Harley-Davidson plans big loan

Harley-Davidson has announced it now has access to a loan of up to $US350 million (about $A500 million) over the next year.

While it has not committed to the entire amount of the loan, it is committed to draw at least $US150m (about $A215m).

The company believes the loan is consistent with its intentions regarding liquidity.

Loan plan

What the loan would be used for we are not sure and there has been no announcement about their purpose, but it could be to help mitigate the effects of the pandemic.

It follows recent measures announced by new CEO and president Jochen Zeitz to ride out the pandemic recession including:

The new measures are in addition to Jochen’s Rewire strategy.

Jochen Zeitz with LiveWire rewire sharesJochen Zeitz with the electric LiveWire

Harley in the news

Harley has been in the news the past couple of months ever since CEO Matt Levatich was sacked in February Jochen was appointed interim CEO and then announced as CEO on 8 May 2020.

In May, it was revealed that Jochen senior VP and CFO John A. Olin bought millions in shares of HOG stock.

This seems to show a vote of confidence in the company by its executives, although some say it may be just for show to prop up the share price.

There is still no statement from Harley about the share purchases and no record of Jochen’s salary.

However, the previous boss was paid a record $11m last year.

Jochen’s five-year “Rewire”strategy also involves expanding “profitable iconic heritage bikes” while committing to branching out to adventure touring, the new Streetfighter range and electric motorcycles.

Harley’s sales have been on the slide for several years. This video gives an entertaining history of the American icon’s problems.

Source: MotorbikeWriter.com

Motorcycle sales up, but shares slump

Shares in Australia’s biggest motorcycle dealership conglomerate, MotorCycle Holdings, reports increase revenue and bike sales, yet shares have dropped 13.7% to a six-month low.

MotorCycle Holdings, which owns TeamMoto dealerships among others and Cassons accessories, released its six-month results showing new motorcycle sales were up 1% while the total Australian new bike/ATV/scooter market fell 6.1% last year.

The report says their used bike sales were up 6.2% compared with the same period in 2019 and overall sales of new and used were up 3.5%.

Acquisitions

CEO David Ahmet says the company strategy is “growth through acquisitions and diversification”.

Last month, the company acquired rights to sell Indian motorcycles in six of its dealerships: Springwood in Brisbane, Nerang on the Gold Coast, Penrith and Auburn in western Sydney, and Keilor East and Dandenong in Melbourne.Indian Motorcycle Riders Group

It follows the announcement in January that Indian Motorcycle would close its factory owned dealerships in Sydney, Melbourne, Brisbane and Perth this year. A statement on a dealer to replace their Perth store is expected to be made “in the near future”.

MotorCycle Holdings also bought two dealerships in late 2019 which are claimed to be “outperforming expectations”.

The company now has 48 franchises operated from 31 dealerships and eight retail accessory locations in Queensland, New South Wales, Victoria and The Australian Capital Territory.

No interim dividend has been declared so the company can “take advantage of any acquisition opportunities that may arise”.

Shares slump

shares teammotoMotorcycle Holdings share price history

MotorCycle Holdings went public in 2016 at about $2.50 a share, reached a peak of $5.22 at the end of 2017 and hit a record low of around $1.25 in May last year.

The Indian announcement bumped the share price about 5c to $1.80.

However, it is now down to $1.50, despite a 31% increase in revenue to $178.2m.

Apart from the impact of bushfires and coronavirus, the problem seems to be that net profit after tax is now $4.8m for the half year compared with $5.2m for the 2019 comparative six months.

Ahmet says the overall new motorcycle market is beginning to stabilise.

However, January sales figures have actually dropped -10.2% on January 2019.

Source: MotorbikeWriter.com