11:47 am, July 24, 2024
US car dealer Group 1 Automotive has announced global profits of almost £600m as its takeover of Inchcape draws closer to completion.
The final stages of the £346m acquisition are currently subject to regulatory approval from the Financial Conduct Authority ahead of an expected completion in the coming months.
The deal will see Group 1 take control of Inchcape’s UK retail operations but the negotiations do not seem to have taken bosses’ eyes off the ball.
New accounts, published today, show the automotive giant made a global gross profit of $766.5m (£594.6m) for the three months to June 30.
That figure is up on 1.2% on the same period last year and is also an improvement on the previous quarter’s $742.6m (£575.2m).
The Q2 accounts also revealed that worldwide revenues rose by an impressive 3% to an eye watering $4.7bn (£3.64bn).
Its UK operations, which include BMW, Mercedes, Audi, VW, Seat, Skoda, Jaguar Land Rover, Kia, Toyota and Ford new car sites as well as a handful of used car centres, contributed $775.2m (£600.5m) – a year-on-year rise of 2.1%.
Gross profit generated from its UK operations in the three month period was $98.8m (£76.55m) – a slight dip on last year’s $105.8m (£81.97m)
On average, in the UK, Group 1 made gross profit of $3,069 (£2,378) on every new car it sold, with a gross margin of 7.3%. When it came to used cars, the average gross profit was $1,392 (£1,078) with a gross margin of 4.9%
The accounts also showed that Group 1 sold 8,388 new cars in the UK in Q1, compared to 10,649 used vehicles.
Reacting to the results, Daryl Kenningham, Group 1’s president and CEO, said: ‘Our UK team remains focused on the acquisition of Inchcape’s UK retail automotive business planned for Q3 2024,
‘We look forward to the successful completion of the transaction which will further strengthen our UK presence through the addition of quality assets with an expanded geographic footprint.’
He added: ‘Our US. team persevered in the face of adversity this quarter.
‘From extreme weather events in Texas and Oklahoma to the CDK outage, we experienced exemplary teamwork, focused on caring for our communities and team members and serving our valued customers efficiently and effectively.
‘Despite these challenges, the US team produced record quarterly new vehicle, parts and service and F&I revenues.’
You can read why car dealerships this side of the Atlantic are proving so attractive to American investors here.
