The past year was undoubtedly the most difficult Combined Motor Holdings has experienced, the listed motor retail and car hire company said on Thursday.

It was releasing its results for the year ended 28 February 2009.

"The challenges presented during the previous year have been exacerbated by the global economic crisis, triggered by the sub-prime loans meltdown in the United States," the company said.

Dominated by a 25 percent fall in revenue ? primarily as the result of the slump in vehicle sales ? operating profit fell 78 percent to R46.4-million, and attributable headline earnings declined 75 percent to R26.4-million, the company said.

However, one positive feature of the year's trading was the group's firm grasp on its cash flow.

"Cash generated from operations enabled the group to fund a dividend payment of R30-million in June 2008, repay loans and dividends of R31.5-million to its BEE partner, and still end the year with cash resources of R212-million," it said.

However, there was no dividend payment for the year ended 28 February 2009.

"With an eye on funding working capital for future expansion, and in view of the ever-tightening lending criteria being applied by finance houses, the directors have recommended that no dividend be paid in respect of the year under review," the company said.

Turning to its retail motor division, it said that national passenger vehicle sales had declined 23 percent and light commercial vehicles 17 percent during the financial year.

It was estimated that the used market reduced similarly.

"The principal reasons for the fall were the high debt levels under which consumers were labouring, and the consequent reluctance of the motor finance houses to extend further credit during a period when they too were facing high write-offs and an increased cost of funds," CMH added.

While customer interest on showroom floors was high, the credit approval levels fell from approximately 55 percent to below 25 percent.

"Customers that gained approval were charged higher interest rates than they previously enjoyed, with the result that the first 1.5 percentage points drop in the prime rate was offset by the higher bank margin."

CMH said the group's workshops and parts departments had fortunately performed well, "providing consistent returns and a buffer against the more volatile sales departments."