INCHCAPE has sold three retail sites in Australia for £63m, it announced today.
In a statement issued via the London Stock Exchange, it said they had been bought by Sime Darby Motors – historically operated under the Trivett banner, selling Volkswagen, BMW, Mini and Jaguar Land Rover vehicles. The transaction is expected to complete in the final quarter of the year and is conditional on final OEM partner approvals and regulatory approval.
The move – enabled, says Inchcape, by its Ignite strategy – will herald a streamlining of the Australasia business around the distribution activities of Subaru and Peugeot Citroen, with Inchcape stating that ‘retail-only operations outside these two contracts will be meaningfully reduced’. It added that following the transactions it ‘will also embark on a reorganisation of the Australasian business around distribution, which we expect to incur exceptional costs in the region of circa £5m to £8m over the second half of 2019.’
It follows the disposal of three other Australian sites announced in May and July to other parties, which combined will generate £76m for the franchised retailer group.
Inchcape added that the impact on trading profit of the latest sale was expected to be immaterial.
Group chief executive Stefan Bomhard, pictured, said: ‘This transaction is another demonstration of strategic progress under Ignite and the focus on our core distribution activities, which generate 90 per cent of our group trading profit.
‘Today’s announcement demonstrates the disciplined utilisation of capital towards this high-returning and capital-light part of the market, where I continue to see both organic and inorganic opportunities for Inchcape.
‘In line with the Ignite strategy and our commitment to be the OEM partner of choice, Inchcape has completed 10 distribution deals since 2016. I would like to thank our teams for their professionalism and commitment to remaining focused on delivering our objectives during this transitional period.’