AutoCanada posts strong gains in Q3
EDMONTON, ALTA. – Financial figures from Canada’s lone publicly traded dealership group painted a rosy picture in the third quarter with positive momentum virtually across the board.
AutoCanada reported an increase in revenue, gross profit, net earnings and earnings per share. The company also said new vehicle unit sales outpaced the industry while same store revenue, gross profit and unit sales exceed the same quarter last year.
“We achieved these positive financial and unit results while also adding a new brand and dealership, Planète Mazda, to our portfolio,” CEO Steven Landry said in a release.
Third quarter highlights included a 10.8 per cent climb in revenue in the quarter to $834.6 million. Operating expenses as a percentage of gross profit declined to 80.1 per cent from 80.6 per cent over the same period last year.
Gross profit was $138 million, up 12.2 per cent compared with the same quarter in 2016, with gross profit as a percentage of revenue increasing to 16.5 per cent from 16.3 per cent.
New vehicle sales were 12,014, up 9.4 per cent and the driving force to profit for the company overall. Revenue from new car sales was $497.7 million in the quarter, up 12 per cent and accounting for 59.6 per cent of the company’s total revenue.
Used-vehicle sales were up nearly three per cent from the same quarter last year with pre-owned revenue hitting $192.5 million. Used-car sales accounted for 23.1 per cent of the company’s total revenue and 8.1 per cent of gross profit, versus 23.8 per cent of revenue and 10.5 per cent of gross profit in 2016.
Parts, service and collision repair generated $104.8 million while F&I generated $39.6 million.
EBITDA attributable to AutoCanada shareholders increased by $2 million or 8.3 per cent to $25.8 million from $23.8 million last year.
“This was a good quarter with topline growth across all areas of the business and an overall improvement in profitability,” said Chris Burrows, chief financial officer.
“Sales are up in every region, and from all but two brands. Our operations are becoming more efficient, and we are seeing a steady rebalancing of our portfolio, across geographies and brands.”
In its outlook, AutoCanada said the strong new car market, particularly in the west where its business is more heavily weighted, has been of added benefit. AutoCanada said its growth strategy would continue to focus on increasing the brands and range of vehicles it offers, with dealers clustered in key markets across a broader range of geographies.
Illustrative of this commitment came recently with the addition of the company’s first Mazda dealership, Planète Mazda, in the Greater Montreal Region where it already has three other dealerships.
“We will also continue to focus on advancing our progress on integration, continuous improvements in efficiencies and deepening our IT and analytical capabilities across AutoCanada’s network of dealerships and at the corporate office,” the company said in a release.
“Acquiring new dealerships and effectively integrating them is key to our long-term success. Same store results, reflecting the performance of dealerships that have been owned for at least two full years since acquisition or opening, is an important metric to assess how well we are doing at integration.”
Capital expenditure on relocations and expansions in 2017 was also on track with the company saying obligations of $8.3 million related to dealership facilities was in line with a previous commitment.