The MotorCycle Holdings Ltd (ASX: MTO) share price is today pushing higher as the company provided a trading update regarding the effects of COVID-19. At the time of writing, the Motorcycle Holdings share price is up 1.52% to $1.67 on the news.
What does MotorCycle Holdings do?
Founded in 1989, MotorCycle Holdings is an Australian-based motorcycle dealership and accessories group. The company has 48 franchises and operates throughout locations in Queensland, New South Wales, Victoria, and the Australian Capital Territory.
While MotorCycle Holdings’ core business consists of the ownership and operation of motorcycle dealerships and retail accessories outlets, it also owns and operates a rider training school and a motorcycle repair business that performs smash repair work for insurers.
In October 2017, the group acquired Cassons Pty Ltd and now also operates a motorcycle accessories wholesaling business.
Motorcycle Holdings has provided a trading update regarding the impact of the global COVID-19 pandemic on its operations. The company first experienced issues from the pandemic in March, which aided its qualification for the JobKeeper program alongside its reduced turnover in April.
However, the company reports that the recent stage 4 restrictions in Melbourne have impacted operations in 6 of their stores. Approximately 100 staff are affected, 70% of whom are covered by JobKeeper. In some good news, the stores will remain open to fulfil contactless ‘click and collect’ and online sales orders. However, the company advises that sales may be impacted by up to $9 million over the 6-week period. Furthermore, Cassons sales into Melbourne may also be impacted by up to $1 million.
Despite this news, stores in other states have reportedly continued to trade strongly and enjoy high levels of demand.
What now for MotorCycle Holdings
In spite of the news, the MotorCycle Holdings share price has pushed higher today, with the company’s shares up an impressive 180% from their lows in March this year. Shareholders of MotorCycle holdings will be hoping that the second wave of COVID-19 cases passes quickly and business is able to return to normal. The news of the restrictions saw the MotorCycle Holdings share price drop sharply at the beginning of the week.
Nevertheless, the company’s liquidity remains sound, with MotorCycle Holdings reporting its cash on hand exceeds $40 million, with its cash position improving thanks to strong trading in recent weeks.