To withdraw your question, simply press star one one again. Please note that today's conference is being recorded. Now it's my pleasure to pass the call over to the Chief Executive Officer, David Ahmet.
Good morning, everybody. David Ahmet here, MotorCycle Holdings, CEO and Managing Director. For most of the 35 years that MotorCycle Holdings has existed, it's been a dealership operator, a retailer if you like. But more recently, we've moved more so into importing and wholesale distribution, and even more so in the last 18 months with the introduction of Mojo Motorcycles. We're still a retailer, of course, and it's an important part of our business, but it's hard to move the dial. You know, once you're 42 or 43 dealerships, another one or two dealerships in a year doesn't move the dial very much. So if we want faster growth than that, we've got to look for new markets. And importing motorcycles and importing accessories gives us that opportunity for the future. We believe that there's much faster growth coming from the wholesale division of our business.
In fact, over 50% of our profit now comes from the importing and distribution of accessories and motorcycles. It's not to say that we won't keep focusing on retail. We will. It's still an important part of our business. It provides a great foundation for the wholesale business. But we don't feel the need that we need to bolt on a lot more dealerships there. The time and energy and investment is probably better spent somewhere else. Having said that, we have just purchased another Harley-Davidson dealership in the center of Sydney. That one was just too good to knock back. In any case, I'd like to now talk about today. We've been with the half-year results, some summary highlights, financial results. We'll talk about operational performance and where we see the future for the rest of this year and beyond.
So the financial highlights starting. So statutory revenue, our turnover was up 6% for the half to AUD 293 million on a like-for-like basis, which backs out, TeamMoto Townsville, TeamMoto CFMoto Springwood, and the Mojo Group, which is the importing of motorcycles. We back that all out. It's a, a 7% decline for the rest of the business. Overall, gross profit was up 2% to AUD 76 million. Underlying EBITDA was down 12% to AUD 21.8 million, giving us a, a NPAT of, AUD 6.6 million for the half. Net assets went down 1% to AUD 195 million, and the directors of our board have decided that they want to declare a fully franked dividend of AUD 0.03 for the half. Talk about some of the highlights, or some of the, the main issues that we felt that we dealt with during the year.
Revenue growth for the full period was up from the contribution of Mojo Motorcycles. We increased our national market share of new motorcycle market. We're now 15% of the total new motorcycle market. So it's been a challenging period for the motorcycle market, without a doubt, particularly the last quarter of the half. The national market dropped slightly, I think 0.5% it was for the half. We had growth in new motorcycles of approximately 8%, so that's pushed our market share a little bit further. I'll talk a little bit more about that in soon. July to October, our performance was in line with our forecasts and very much where we expected to be. But the last two months, in November and December, we did notice a you know, a significant drop in the inquiry right across the board in all markets.
So one, we feel certain that that's due to the impact of the rising interest rates and the cost of living pressures. And it's impacted our result, without a doubt, and cost of doing business has also played a role there too. Having said that, we have seen a bounce back in January and February, so things are looking a little more optimistic than they were, say, in December. Financial results. So our profit results for the half. Total income, as I mentioned, was AUD 294 million, up 6%. Cost of sales was up 8%, leaving us with a gross profit of AUD 76 million, AUD 76.3, which was up 2% on last year. Gross profit margin, fairly steady at 26%, down 1% from 27%, last year.
Employee benefits expense, which is wages mainly, was steady across the group, and that's driven by some reductions in wages in the retail business. So 35.7, identical for both halves. Rents are a big problem for us. They keep going up, quite rapidly at the moment. We've seen a steep decline in rents that we've seen for a very long time. So that, and of course, there's some additional businesses there as well. Occupancy expense is AUD 1.9, up from AUD 1.5 last year. Other expenses up 23%. There's nothing going down at the moment, very much. And floor plan interest is up AUD 1.4 from AUD 642, and that does encapsulate wholesale and retail floor plan interest. So operating expenses were up 8% for the half at AUD 54.5, giving us an underlying EBITDA of AUD 21.8, down 12%.
Underlying EBITDA margin is 7%, down from 9%, 17% down. Depreciation in interest on right-of-use assets was AUD 7.6 million, up from AUD 6.7 million, giving us an underlying EBITDA, as reported last year, of AUD 14.2 . So this year, the way we reported it last year with the pre-AASB tag, 14.2 last year was 18, so down 21% on a like-for-like basis there. Depreciation and amortization was AUD 9.4 million. That was up from AUD 7.2 million, and net bank interest AUD 1.4 million, up 116% from AUD 675,000. Net profit before tax was AUD 9.5 , down from AUD 14.8 , and net profit after tax was AUD 6.5 million, down from AUD 10.4 . On a like-for-like basis, so excluding Mojo and a couple of other dealerships, total income was still AUD 231 million, compared to AUD 247 last year. Given, you know, the last two months have dropped off quite a bit, it's not too different.
New bike sales, as I mentioned, were up for the half. The cost of sales went up 5%. The gross profit, AUD 61 million as opposed to AUD 68 million last year, down 11%. Gross profit margin, 27%, as opposed to 28% last year, 1% lower. Employee benefits, down a couple of million dollars, but AUD 2.5 million, so AUD 32.5 , last year AUD 34.9 . That's a result of us taking a fairly aggressive approach to cost cutting during the half, and wages is a big expense, and that's where most of it came from. Occupancy expense, AUD 1.7 , up from AUD 1.4 . Very difficult to roll out that one. Other expenses remain fairly steady, AUD 11.3 , up from AUD 10.6 , up 6%. Bank and interest for the, which is essentially the retail group, was AUD 877, up from AUD 470.
So a reasonable increase as the new bike, as the order book has dried up and the new stock inventory's available everywhere, everyone's got plenty of stock at this at the moment. So underlying EBITDA, 14.8, last year 21.3, 30% decline. And the margin for the EBITDA, underlying EBITDA, was 6% last year, 9%. Depreciation interest on the right-of-use assets, 7.3, up from 6.6, giving us an underlying EBITDA as reported last year of 7.5, and last year 14.6. The balance sheet, we have used quite a bit of cash over the last six months. Our cash position is 6.6, down from 24.7. So, in November, we paid the earnout figure to the Mojo owners, which was about AUD 10 million.
So AUD 10 million in cash went out in November, and since then we've purchased the Harley-Davidson dealership in Sydney, which will be a total cost of about AUD 5 million. I don't think we paid for that till January, so that won't be in these figures. Trade and other receivables, 11.3, down from 12.1. Inventories have gone up slightly. We're looking at pulling that back now. There's some areas where we think we're probably overstocked, so we'll just start trimming that as we see fit. 162 up from 155. Leases or right-of-use assets, 46.4 last year, 40.8. Plant and equipment, very steady, they're 13.7. Goodwill and other intangibles, 145, down AUD 2 million. Investments were steady at 6.7. That's our investment in the Motorcycle Finance Company. Tax assets, they're 1.8, other assets. So total assets, 397.
If we look at the liabilities, there are no significant changes there, but they're down AUD 10 million. Total equity, AUD 195, down from AUD 197. So fairly steady. Market value. So for the period, so net profit after tax was AUD 6.5 million, down 37%. Share price was AUD 2, down 16%. Securities on issue, slight increase there of about 500,000, so 73.8 million shares. Dividends paid last year was AUD 0.20, as it was year before for the last 12 months. Basic earnings per share was AUD 0.26 per share for the last 12 months, down from 32. Price-to-earnings ratio for the last 12 months was 7.7, price of that was 7.4. Dividend yield was 10%. Year before that was 8.4%. So, good, good paying dividend last year. Revenue growth, well, we, we tend to grow the business every year.
One way or another, we find ways to keep growing it, and that's been the story for as long as I can remember. So if we look at recent years, there's 13% compound growth over the last few years. We expect that to continue. There'll be further growth in the second half this year. And we've got things happening to make sure it keeps happening beyond the next couple of years. Underlying EBITDA and margin. So if you look at that graph there, you can see that 2021 and 2022 were particularly strong. They were assisted with JobKeeper. You know, we also dealt with the COVID restrictions, but last year was our best year that we've ever had at AUD 55.3 million, very strong trading, and so we're struggling to replicate that at this stage, but I think in the near future, we will.
So we're, we're down a few million there for the first half. It's very strong second half last year, that'll be hard to replicate, but given that the market is definitely quieter. But having said that, early signs for January, February are very encouraging. Our March underlying EBITDA margin 7.4%, so artificially inflated, I think, in 2021, 2022 at 12.6% and 10.6%. 2023 is, is probably closer to where it should be, and 2023 was a pretty good year with, with strong margins. Margins have come off a bit this year, so, we're seeing a bit of contraction there, probably closer to long-term average, I would think. Net profit after tax, you can see it's we've, been fairly steady, but this year, we've, we've come off a little. But certainly, there are reasons why that should improve going forward. I'll talk to that soon.
So we've got a number of various, you know, channels of income nowadays. It's retail and it's wholesale. So I'll just go through that line by line. If we look at the first section, it's new bikes, new retail motorcycles, that is. So up 8% in volume, but down 14% in gross profit. This is gross profit, this graph. So that obviously tells you that margins have contracted during the period. It's important that we keep that volume there to make sure that we get our volume bonuses from the manufacturers. So there's a lot of focus on maintaining the volume or reaching those targets, and that does affect your margin from time to time. In a market where sales are declining, dealers get more competitive, so we're bound to see more discounting.
You know, our margins are down probably AUD 200-AUD 300 a bike on new bikes, and that's representing that drop there. It hasn't continued to drop. It's maintained that sort of level, so I don't think it's going to decrease further, but I think we're back to a new normal on our new bike margin. So, that will be steady as she goes. We'll try and grow the volume from there. With new vehicles wholesale, the graph here is comparing 2 months to 6 months, so it's obviously going to be much better in the last 6 months. But as you can see, it's a significant income producer for us, and particularly when, you know, you allow for the fact that the wholesale business is very light on overheads or operating expenses when compared to the retail business.
So, the gross profit there is going to result in a much better net profit as well. Used motorcycles, we're coming off the best half that we've ever had with used motorcycles last year. We've got a great result there. We're down 8% in volume, down a total of 16% in gross. So margins have come off slightly with used, but not a huge amount. More closer to AUD 100 a bike from AUD 1,700-AUD 1,600, so not significant, but the volume has come off, and that hurts. Now, having said that, we have for the last two months, January and February, actually caught up and turned that around. So whilst we're falling short every month for the last half, we've now actually, for the first time this financial year, have exceeded last year's sales with used bikes.
It's been a focus for us, and we've been working hard at it, and we've got back to that point. We've maintained certainly better margins than before COVID. We've maintained a quite good margin there, so now we've got to build on that with some volume, and hopefully, that can help drive a better result in this half. So going the right direction there for sure. Parts and accessories, again, that is retail, and it's in line with the other departments, but it's costly for the group. There are challenges with the accessories. There's very fierce competition in the marketplace, more so now than ever before. We see that the answer for us to maintain sales is to focus more on our online accessory sales. They are at a fairly small percentage of the business, only 5% of our accessory sales are online.
Having said that, it's up from AUD 400,000 a year two years ago to AUD 1.1 million last year to AUD 3.3 million this year. So we've kinda got the system sorted now, and we've got a business model there that can let that grow. So we expect those online accessory sales to grow quite rapidly over the next few years, and hopefully, we'll stop some of this retail, you know, decline. At a wholesale level, surprisingly, only down 3% for the half. I thought it could have been worse than that given the disruption that that business has had, really. It's a testament to just how well the guys have done in that business in the last six months. It's been terribly disrupted, from a couple of different areas.
more so, most significant being the introduction of a new warehouse management system, introduction of a new operation system, and a new business-to-business. All happened in October, and it knocked the business around considerably, disrupted. Now, to make matters worse, we had a couple of opportunities come along at exactly the same time to buy other smaller wholesale businesses just for their stock value, but it gave us access to their brands and their products for Australia. So, there was two of them. We bought both of them within a month or so right in the middle of this. We couldn't help that.
It had to be done at the same time, but again, that further disrupted the Cassons' business and pushed it, you know, well behind, up to three weeks behind in deliveries, which is way too long, upset some customers, and it did rob us of some sales. The good news is we've finally completed that last month. We've bedded in all of that extra stock that had to come in. We've bedded in most of the IT program, made massive steps forward with our business-to-business website. So the 90% of the hard work is done, and now we can, from this point on, get some of the benefits from it. One of them being, you know, much better efficiency in our warehouse.
If we look at the last six months, we've had the warehouse literally working seven days a week, so we've been paying overtime on Saturdays and Sundays to keep up, which is an expensive way to employ people, of course. So we'll be able to start dropping that from here on, reducing our operating expense. The IT will bring in a lot more efficiency in the operation of the business as well. It reduces the number of things like mispicks, you know, having returns, things sent out that are incorrect. That's critical in the success of the wholesale business. Not to have things returned, it destroys your profit, essentially. So now, all of our stock gets scanned in and scanned out, and that virtually eliminates any chance of that they're sending the wrong stock.
So there are efficiencies like that, at least in the overtime, that will make a considerable difference. And now, you know, we can focus more on the sales department of that business. We've left it alone because we really couldn't sell anymore. The warehouse was absolutely to capacity. So rather than make the situation worse, we held off, and now our focus will go back onto the sales, which we believe we can develop fairly easily and quickly. So there are lots of reasons why we should get a much better result out of the Cassons' wholesale business, just not just this half, but for the future. These are long-term measures that build a better business long term, so the next three to five years should see some significant returns on that.
If we look at services, that is, workshop services, selling our labor, our techs, well, we've been able to increase the amount of work, the retail labor dollars, but the cost of sales has gone up considerably with our techs. We're, you know, keeping staff has been really difficult in this part of the business, and the mining company in particular has targeted our techs and offering to pay a lot more money than we've had. So we've seen a significant increase in our cost of sales with workshop labor. So a decline of only 1% is pretty good. I think we're probably going to have to look at increasing our rates again, just to make sure that we're getting the best return possible. Finance and insurance income is the other channel, so, fairly significant, you know, AUD 7.9 million for the half.
It's down slightly, AUD 200,000, and that will be that used bike volume down 8%. That's probably responsible for that. So really, the, the performance there is pretty consistent. So move on to the operational performance. Retail part of the business, I don't think there's any doubt that the Reserve Bank's intentions are starting to, to hit home. People are spending less. Rising interest rates and cost of living pressures have dampened discretionary spending, particularly from November on. November, December, we noticed a, a significant reduction. It certainly wasn't the December that we were hoping for. New motorcycle sales for us, for our group, rose 8% across the group. The profit fell 14%, as I mentioned. Obviously, that's the margins. The market dropped 0.5%. So we're getting the business. People are choosing to, to deal with us.
It's just that, they're keeping us honest and, shopping us, and they can't buy them cheaper elsewhere, so we've got no, no option but to meet the prices. Our used motorcycle sales fell 8%, and gross profit fell 16%, as I mentioned previously. We've seen that turn just in the last 30, 60 days. So all, all year, I've been trying to catch up to last, to last year's used bike volume. I've finally got there. So I'm hoping that in this half, we, we can exceed last year's volume, so a turnaround from that result. Retail accessories, we talked about. The, the sales only fell 6%, but the gross profit fell 14%. There's a couple of different factors, you know, working there. It's not just margin contraction. It's only slight in this case.
But, of course, we write down the stock as it ages, and we came into the half with a high stock position. We didn't sell quite as much. We've got 6% growth in sales, so that means some stock will age, so it gets written back aggressively. So there's quite a substantial write-back there. So the stock owes us the right money, but that contributed to that 14% decline in new motorcycle unit sales. There's a picture of the market, so you can see the market was down at, you know, 51,100-50,900, whereas we put on about 600 units, so we're certainly outperforming the market there. I think we can always do a bit better. I think we've got some dealerships that are underperforming, so that's an area that we'll be focusing on.
In regard to the dealerships and performance levels, I think that there's more profit growth for us organically in the retail division than there is from acquisitions. So our focus will not be looking for more acquisitions at this stage. There's too much lost opportunity in the group now, so the focus will be on training and putting systems in place with the existing retail network. There's still substantial organic growth lying there, which we intend to pick up. If we look at that, that's new bikes, so we're up 8% here. Used bikes unit sales, again, down on last year, which was the best half that I think I've ever seen, at 5,480 units. That's a very good result.
We're not that far off it, and certainly, if we can turn things around for the second half, we might be able to close that up for the full year. That's still an important part of our business. Our stock levels are back to normal. It took a little while to get there. We cleared out a lot of stock last year. So very close eye on the aging of that stock, and we'll just keep marketing strongly with used bikes. The Mojo Group is the big part of the business that imports motorcycles and distributes them across Australia and New Zealand. It's this year we had a six-month contribution compared to two months last year. Those are two of the strongest months that our business has ever had the previous year. And this half has had four very strong months and two weaker months.
We look at that as to reasons why. We're coming off a very high, high base. Interest rates affect farmers as well, of course. It affects their bottom line. But, prior to December, they were talking very much about an El Niño effect from the weather. Farmers like rain, and at that stage, it was getting very dry across Australia, and we think that that played a role in some of that ag market sales coming off for a couple of months. Having said that, the business has bounced right back, and I expect a very strong finish to the year. January was a good result. February looks like an even better result. May, June are usually the best two months because that's the people buy before the, the to get the tax deduction.
But independent of that, well, I met just yesterday with some senior management from CF Moto, our Chinese partners, and we ran through the new motorcycle models that they're releasing, so they're out this year and beyond, and there's some fantastic product coming there, which will really help our sales. So if, and I say if because I'm not sure. If the ag market is off for the rest of this half, we're confident there's some really good motorcycle models that will backfill any decline there. There's some models that are right on point, and we've got strong forward orders over already. So last year, I think we had 40% growth in the motorcycle sales, so it's Mojo, coming from a low base. And this year, we would expect at least 50% growth in motorcycle sales.
So that's a strong growth area of that business is motorcycles, which is traditionally, it's been very strong an agricultural product. So that'll continue. Motorcycles will help there. This, I think I mentioned in the introduction. This part of the business is where I see our growth over the next five to 10 years in particular. This is the engine room of our growth. There's new product out there. The market is changing. There's certainly opportunities there that we're looking very closely at. We have picked up an electric motorcycle brand, which we start distribution of the next month. It's an off-road e-dirt bike. We've been retailing them for probably 18 months or so. Very popular product, very keen to get our hands on it, and we've just secured the national distribution for that brand for Australia.
So we expect that to be pretty exciting over the next 12 months. So, different market. It's electric. It's off-road, but it can be registered on the road as well. It looks more like a mountain bike that's electric than a motorcycle, but it has really impressive specifications. So we expect that. That's a high level of interest in that product. We expect that to go really well for us in the first 12 months. And of course, we've spoken to other motorcycle manufacturers in China and the U.S. Product is being offered to us now. We have certainly. We're not truly in that importing and distribution business now. Opportunities are coming along, and we're being discerning. We're not just jumping on everything.
We have knocked back a couple of brands that have showed interest in us just distributing their product because we didn't think they were right. We are talking to others, so there's certainly the scope there for us to do more in the future, particularly as electric bikes come into the market more and more and more manufacturers come into the market. So, yeah. So I think the motorcycle part of that business is going where we'll see really substantial growth in the next six months, 12 months, five years. We will put more CFMoto product into our dealerships. I think we're just about to put it into our eighth dealership. So, now we're selling it across eight stores, and that helps underpin it.
The brand is getting more and more acceptance in the market all of the time, so I think the future looks really good for that part of our business. Wholesale accessories, well, I've spoken to that to a large degree about the changes and the headache involved in acquiring those other businesses and the IT, very much behind us. It did affect our bottom line last year, and it shouldn't from here on, so we're looking for improvements there. Our finance joint venture is steady as she goes. The volumes have remained steady. The profit is challenged on the cost of funds. You know, we've had our interest rates go up, of course. We haven't been able to pass them all on, so that has trimmed our EBITDA to some degree.
But, you know, importantly, the key measures are, you know, within budget. Losses in particular, have gone up a little bit over Christmas. We'll keep a close eye on it, but they're certainly well below our limits, so we would need interest rates to drop, to see that business improve its profitability, I believe. So hopefully, that'll not too far away. I'd like to talk about, where I see us going in the future, and this is important. I look at what we've done over the last six months, and, you know, virtually everything that we're working on is for the short to medium term and not the next 90 days or 60 days.
So, I understand that nobody likes to see a short-term result that's not positive, but we're working on, you know, a five-year plan or a 10-year plan, and things that we are doing there are building, I think, a much better business, and I think we'll see, you know, significant growth over the next five years. Our Forbes & Davies wholesale distribution in New Zealand is currently moving warehouse. That's almost complete. And then we'll have a base for our CFMoto product over there as well. We'll have a management team and infrastructure. So we're putting all the bones in place, all the infrastructure in place to allow for this growth. That business was out of space, you know, with its accessories range . It's grown rapidly over the two years that we've had it.
Couldn't put any more stock into the building at all, so we needed bigger space, and it's just great that there's an efficiency with the consolidation with Mojo. So, I mean, everything is set there to keep going well. Its profit is up for the year. So I think we've got good potential there. Motorcycles are exciting for us at a wholesale level in Australia. Retail, we've got organic growth there by fixing some of the underperformers, and by that, I mean probably consolidation of some dealerships. I think we can; timing is right now, and we needed a bit of a decline in the market to be able to do this. I think I can push through some of the shutting of a site and taking that product and putting it elsewhere, spreading it out into other dealerships.
That way, we hang onto the gross profit of the business, but we lose the overhead of the business. There's a couple of opportunities there for us to do that, so I'm instigating that as we speak. That should make quite a difference. New Harley-Davidson dealership in Sydney opens its doors. Soft opening in March, so we should be in full swing by first of April. So we won't get any contribution this year, but next year, we should see something. The Harley dealerships are, you know, by far our most profitable dealerships, so this will be number eight. So, you know, good for the future next year. We won't be looking for a lot more acquisitions than that at this stage. It would have to be a standout opportunity for me to do that.
There's far more profit to be gained by focusing on existing sites. So that's what we're going to do. Our ongoing projects, our focusing on the operating costs of the retail in particular but also wholesale. Wages, keep them tight. We have got the businesses fairly trimmed, but there's always a bit more there. We will look to consolidate some sites. I think that makes good sense, and I think we'll be able to do that now. We'll have a contribution from Harley-Davidson at an additional site. Our online accessory site is growing very rapidly, you know, up from AUD 1.1 last year to AUD 3.3 this year. That will continue to grow at that rate. We've had a lot to learn there about logistics and how to fulfill.
We've learned a lot there, and we know exactly what we need to do to make that profitable in the future, so we'll keep focusing on that part of accessories. Wholesale accessories, I've talked about really what we're doing about the IT projects and the new product there, increased warehouse space in New Zealand, so there's lots of reasons there why that should be a better, more efficient business. I think the business is there. I think we can gain market share, and really got a very good result given that our retail accessories were down 6%. You know, that should affect the wholesale business to about the same level, but they're only down 3%, which means the rest of the market, even though we've been slow to supply, stuck with us. So I think the time's right there to really grab more market share.
And new motorcycle as well. We've just, you know, we've got, Sur-Ron, which is a new brand. With New Zealand, we, we haven't really put a lot of effort into yet. We're waiting for the warehouse to finish to be complete, and then we'll get more feet on the ground there. And we've got, you know, a very exciting range of new motorcycles coming. There's at least five models coming this year, and one or two of them look spectacular for volume, so we expect a significant increase in wholesale of motorcycles to the tune of another 50%. So I think we think, you know, whilst the result was not as exciting as we would have liked, we've got plenty in play for the future. We think that the, the wholesale distribution, importing, part of our business will drive the profit more so than the retail.
We won't look for any more acquisitions in the short term. I think we've got too much work to do to get those dealerships performing to the level that we'd like them at, but we are making progress. We have turned around some dealerships there that needed some work. So lots there to work on. Lots there to deliver for the future. And so I'm happy to take any calls and any questions, I should say.
Thank you very much. And as a reminder, to participate on the Q&A, you need to press star one one and then wait for your name to be announced. To remove your question, simply press star one one again. One moment for our first question, please. And it comes from the line of Sarah Mann with Moelis Australia. Please proceed.
Morning, Dave. Just a quick question.
So how do I know it'd be you?
Just a question on, I guess, the comment about, like, market share gain, and trying to square that with the like-for-like revenue going backwards. So, I know you kind of alluded to the fact that part of that was discounting, but just wondering if there's any kind of mix changes as well in terms of, I guess, the higher or lower margin on revenue brands, just given that the ASP per bike has also fallen away quite significantly.
Yeah. Yeah. Yeah. In December, we had a really tough month with Harley-Davidson. The volume dropped tremendously, and that cost us a lot of profit in December, so that really added to it. But other than that, it's been pretty steady as she goes. I don't think there's been a significant shift in the mix of bikes other than that, that particular month.
It's generally, the margins overall have all come off across the board. Harley are very high margins, so they probably had a bit further to fall, so they have come off. And I think, you know, a fair bit of it will, will come. Harley margin. We have been able to maintain the volume bonus, though. That was actually up AUD 300,000 for the half, so that doing that 8% increase there has been really good for, for hanging onto that, and it's worth about AUD 3 million, you know, for the half, so it's significant. But I think it's overall, it's the, the margin on the new bikes is, is off about AUD 300 a bike across the board, and, you know, Harley would represent a, a big chunk of that.
Gotcha. For Harley, the, the weakness in December, that was just the consumer being tight. It wasn't like supply issues or anything else at all?
I know, it wasn't a supply issue. They, they had those issues earlier in the year, but, g uys, w e had the bikes. It was just December was a really tough month for retail. It, I guess it wasn't just Harley, but that's where we noticed it the most. I think that's where the most profit was, most profit was missing. But, you know, we didn't sell accessories that we expected to. It really felt like the brakes had been put on in December, and, you know, it's normally a strong month, December, for accessories and bike sales and what have you, but this year was different. Accessory sales had been pulled forward into Black Friday sales, I think, in November, so we had quite a reasonable November for accessories but surprisingly a tough December. Okay in January.
Bike sales strong in January. New bikes up. Used bikes up. First time I've seen used bikes up, you know, this year, so that's a good time. We've got the stock. We're focusing on it, that's for sure.
Gotcha. So just a comment about you and used bike sales being up in January and February, but is this kind of in line with, and I know there's some seasonality, of course, but this kind of back in line with the July to October demand that you said was broadly in line with expectation, or is it still kind of lagging, and it's just only marginally up?
No. Well, I think our new bike volume in January is fine. It's good. Used bikes are up a few percent. It's pretty close to where we'd like it to be.
I would still like another 50-odd units there, but compared to last year, the second half last year did come off, you know, so those numbers, we're not cycling, you know, the same numbers that we were in the first half. The first half, the retail sales were quite strong last year, and the second half came off a bit, so we are cycling softer figures, to be fair, but it, you know, it's certainly going in the right direction, that's for sure.
Gotcha. And GP's.
That's still tough. And no mistake, it's still at a retail level, it's a very tough market, but wholesale, it seems to be very different. It seems to be quite more robust.
Got it. And GP's not getting worse, overall?
No, it's for new bikes. It increased slightly.
In January, it increased slightly, but down AUD 200, not AUD 300 on. So, the average being about AUD 300. So, the trend is leveled out now, very much so, so we're not seeing it fall away any further than what it has, on average. I think it's just inquiry is down at a retail level. We're doing a pretty good job with inquiry we've got. We've obviously improved our efficiency there 'cause our inquiry is down considerably, but we sold more new bikes in that last half of it. So, you know, I think we're focusing on it, and we're getting quite a reasonable result there. Pulling back wages quite a bit at the retail level, that's made it, you know, everybody on their toes, that's for sure.
Operating expenses are a big problem for us with rents up so much, workers' comp up so much, electricity and fuel. Those things are, you know, our cost of doing business has risen dramatically, and so I can pull the levers on wages, which I have, but some things are a little more difficult.
Yep. That makes sense. And demand for, or sales across January and February for Mojo, so I understand there was, like, some destocking at the dealer level across November and March.
Yeah. Yeah. Look, we've had a much better January, much better February again, so February's, you know, we would have thought would be a quietest time of year for that product but bounced back up well, much better than November and December. I think we might have panicked a little bit in December.
We had a couple of quiet months there, off some exceptional months the year before, I might add, but really, that business is in good shape. It's already bounced back, and we've got yet to get the exciting motorcycle models which start arriving March, April, May, and then we have May, June, the strongest two months of the year normally for the agricultural product. So I really believe Mojo will just keep going from strength to strength, and we keep, you know, selling more of that product at a retail level as well. We're certainly underpinning the result there. You know, I think we sold 850 bikes last half, so out of the retail outlets, which goes straight to, you know, AUD 1 million, more than AUD 1 million dollars gross profit for Mojo. So we don't run these businesses in isolation.
Obviously, retail's there to support the wholesale and vice versa, so that more motorcycles coming is really good for, you know, our retail outlets. We're not traditionally a ag bike retailer. You know, that's with very few country dealerships. But the road bike product that's coming is right up our alley, and we're just putting CFMoto into Brisbane now, which will be our eighth site, so we'll be able to help underpin those motorcycle results going forward. But, you know, really, it's the whole market that I think will like these bikes. We've seen some strong orders on some new models coming.
Gotcha. And the last question is just around some of the work that you called out around, so you think some of the underperforming dealerships in your network via consolidation.
Can you give me a bit of a feel for, like, you know, looking at your dealer network now, like, what percent do you think are underperforming, and how many can you reasonably kind of consolidate with that, if I can use the word?
Yeah. Okay. So I've got two that that I'm happy with their results for the half, and they combined would have lost AUD 500,000, say. And one of those sites, I'm going to close down, but I've managed to talk the manufacturers into letting me keep the product at other sites, so there's two brands there. One will go to one site, and the other brand will go to another site in the area. So hopefully, that means we won't lose the sales. We won't lose the gross profit, but we can get out of the overhead.
Now, I only make that decision because it's only a two-year-old Greenfield site, that one. I didn't believe we would be able to get it to break even, you know, in the next near future, so there's no point hanging onto it. Manufacturers are more willing to listen to this sort of thing now 'cause they know it's a much tougher market. They're hearing the dealers, you know, cry about it, so, they in this case, I had to get Honda, Polaris, and, CFMoto to agree, which was pretty straightforward. Everyone agreed to it. Husqvarna is another brand, that we moved. It worked, so, really good move. The other one is a dealership that we've expanded, a lot in. Its sales are really pretty good, but our overheads are too high.
We've made the site too big, and it's just got too much in overhead, really, for the gross profit, so I think we go back to where we were. We scale that one back. We'd lose some rent, and we consolidate that business. I think we'll have a very good business there. And again, it's probably, you know, I'm looking for a AUD 500,000 turnaround in that business. Beyond that, I've got another dealership that is underperforming in the last half but has performed much better previously. I think it's just a management issue. I just think the management is not focused enough or motivated enough. That's training. So I've got someone that can go in there and train and motivate and get that one back on keel, and that's probably worth, in a turnaround case, it's probably AUD 300,000.
There's another one like that, and that's probably about it. There are four there that are significant. I think I have 42-odd sites. Harley's been such a great performer for us for such a long period of time, and in the, you know, that November, December, it came off a bit. It bounced back in January, so, I mean, it's not a great long-term trend but just had two shockers, and, you know, our Harley dealerships deliver a lot of profit on a monthly basis. They were down, you know, something like AUD 700,000-odd for the month, but has bounced back in January, back to normal.
So just and across the board, November, December, and January, we saw all motorcycle, you know, dealerships that we had a decline in profit other than some of the other ones that needed to be turned around, which were going really poorly in the past, which were going better. Some dealerships actually improved their performance for the half, but by and large, most of them, you know, suffered from a, you know, a decline in inquiry and demand, and so it's, it's hit them all. But there's probably four there that, you know, really hurt us too much, and I'm, I'm in the middle of, tackling that now.
Good. Thanks very much, Dave. Appreciate it.
No worries. Thanks.
Thank you. As a reminder, if you do have a question, simply press star one one to get in the queue. All right, sir.
I don't see any further questions in the queue. I will turn it back to David for final comments. Oh, I'm sorry. There's two that just popped up, sir. Oh, one moment, please. And we have a question from Declan Carroll with Wilsons. Please proceed.
Hi, Dave. Thanks for your time. So we're talking about [audio distortion] cost. It stayed flat, compared to PCP. You talked about [audio distortion]. Quite a cost line there. Could you just provide some more context on what you've done around that?
Yeah. That, that covers all operating expenses, all those wages, like-for-like they're not like-for-like that's with additional businesses, it stayed flat.
For like-for-like basis, it was about AUD 2.5 million lower, so we have pulled the wages back quite a bit, but when you add in Mojo and a couple of others dealerships, it remained level at AUD 35 million. But look, that's the big one. That's where the savings can be made. That's by far our biggest expense, and very difficult to do much about the rents other than, you know, get out of the site, like I just mentioned, consolidation and subletting that one and moving on. There's two that I'd be looking to do that with, so to reduce the rent that way, but as far as trying to negotiate a lower rent, that's pretty tough at the moment. You know, rents are going up.
Commercial values and, you know, have gone up, and rents have gone up accordingly, so we're seeing some pretty hefty increases there over the last 12 months. So other than getting out of sites, there's not much there. And the rest is pretty fixed, to be honest. Advertising isn't up. We've kept that tight. Wages down effectively, you know, so you know, there's bits and pieces, but it's wages is the big one. You know, that's where we can really make a difference to the bottom line.
Yep. Perfect. Thank for the colour . And just on working capital, so your inventory's increased over the period, and you've noticed a drop in your payables. What are you thinking about working capital going forward?
We're certainly have enough for the time being. We don't have any, we don't have millions of dollars up our sleeve.
There's another AUD 10 million in overdraft available to us if we need, needed it. I've got a bit of equity in the new bikes that I'm going to pull out. We were paying new bikes out last year at one stage when we had too much cash and didn't like paying their interest rate. We haven't turned all of those bikes back into cash yet, so I've got AUD 7 million in new bike equity there, and at least half of it could come out pretty quickly, so I'll do that.
Used bike stock levels are at the highest they've been for 12 months, so I've pulled them back during the course of the year, and I've let them run up again in chasing volume for used bikes, and we're starting to get there, but there's probably AUD 1 million in used bikes that needs to come out. Our inventory when sales drop, you know, your inventory gets older, so I think it both retail we've got some inventory that's starting to age. We need to. It's costing us in write-downs, so we need to shift that, so we'll have a. We're launching a large used bike and accessory sale across the web, you know, this week, so we'll turn some of that into cash. Cassons has got plenty of stock. Mojo's got plenty of stock.
We want to carry plenty of stock with Mojo, for the rest of this afterwards. It'll be stronger, I believe, so we wanna be ready for the demand in May, June. Cassons has got some aging stock that I really wanna turn into cash. That's more of a result of the bicycle industry slowing up tremendously. Bicycle, as you know, probably had a boom during COVID. It's really crashed quite difficult quite hard in the last 12 months, so we've got a bit too much inventory there, so we're very keen to offload that. So, if anything, we'll probably see the inventory come down a little, I think, over the next six months.
Yep. Perfect. All right. Thanks for that.
Thank you. One moment for our next question. It comes from the line of Jared Gelsomino with Morgans. Please go ahead.
Hey, guys. Thanks for taking the question. Just a couple, so if I'm just looking at the Mojo business now, I think, you know, you've said, you know, in comments, Dave, that there's gonna be a struggle to replicate the second half. But if I'm just looking at Mojo, I think, but there's some reference to the group, but Mojo in isolation, I mean, you know, you started out as a strong start of the year by the time trading being better in February. You've got new models coming in, as well, in the fourth quarter of the year. Season is stronger as well. Yeah. Yeah. We're starting to get a little bit better or improving, at least, and so realistically, like, is that business, the Mojo business, not on track for growth in the second half of 2023?
Versus the second half of 2023?
Well, I think so. I think it'll be a good half for Mojo. I may be glad to make myself clear before. I think, you know, we saw a hit in November, December, but we bounced back from that, you know, quite considerably, and the products coming will really underpin the results, so it would've been a strong half last year for Mojo, I think, without a doubt, but we'd be looking to at least replicate that, I think. You know, January's off to a good start. Feb is off to a better start, so no, I think it's the main concern is the retail division, certainly not the wholesale division. It's retail is where the profit's missing.
And the margins in that Mojo as well, just talking to that, like, just on the wholesale sector, new, new vehicle sales, they look pretty, yeah, the GP sales in that business look, you know, reasonably strong. It's not getting better half on half, I guess. Can you sort of hold on to those margins? Good to know.
Yeah. So far we have. Yeah. So far, look, look, it is getting more competitive in that space. We are seeing other manufacturers wanting that volume back that they've lost, so they're starting to throw money at it, but at this stage, we've held our nerve and held our margin, so we're not seeing a big, big hit there. Look, overall, four-wheelers are more profitable than motorcycles.
You know, they generate more dollars profit, more margin profit, so selling more motorcycles might reduce that percentage, but it, you know, it's still it, it puts money in the bank, so margins might drop a little bit over the next three or four months, but that's because of increase in volume of motorcycles. But the four-wheeler part of it is still, you know, is good. We're not seeing margins come off there. Not yet.
That's great. And maybe just broader one in terms of industry volumes.
I think, you know, the last 10 years or so has been probably relatively a story of two halves in terms of road bikes, and clearly, there's a bit of a gap between volume for obvious reasons over the last five years where we were, sort of between sometime like 2014- 2018, so I guess disinterested in whether, you know, are we nearing the trough of, like, maybe some huge road bike sales, potentially turning a corner, or do you think there's maybe a structural element where we'd like to see, longer road bike sales for longer lower for longer?
To, to be honest, I really think it's just to do with the, the high interest rates and the cost of living pressures.
I mean, there's a lot of cash that's come out of the economy there that, you know, and motorcycles are discretionary spend, so, I don't think we're going to see that side of the business improve dramatically or motorcycle sales improve dramatically until interest rates come down. So if that's later this year, I think that'll be that'll give people confidence, and they'll start spending again. In the meantime, what we have to do is get our efficiency right and get our operations in, you know, in, in check. We don't really need to sell any more than what we are. We just need to make sure that we've got those overheads balanced for each particular business, and that's where we've got a bit of work to do, and that's where I see, yeah, the organic growth coming from.
So, I mean, I accept that the volumes are where they are now. I'm not expecting them to improve, you know, dramatically. Maybe used bikes, I'd like to see improve, but not new bikes. I think it's really just about management and setting up our businesses so that they can maximize the opportunity.
Okay. Great. Thanks, Dave.
Thank you. And with that, I will conclude the Q&A session and turn it back to David for final comments.
Thank you very much. Thank you, everyone, for your interest in MotorCycle Holdings. I'm sure that the future is looking better than the last half. We have taken lots of steps to build a better long-term business. It's frustrating when you don't see those results straight away, but it's critical for, you know, the next five years. Okay. Thanks very much. Bye now.
With that, we thank you all for joining, and you may now disconnect. Goodbye.