Group 1 Automotive achieves record Q2 despite weak UK car sales

Group 1 Automotive highlighted the strength of its UK new car order books after posting a record performance in Q2.

Car retail group AM100 reported a 14.3% rise in revenue to $4.1bn (£3.4bn) in the second quarter as gross profit rose 18.3 per cent to $768.4m (£636.4m) and diluted earnings per ordinary share from continuing operations of $12.1 (£10) – the highest in its history.

But year-on-year sales comparisons in the UK have fallen in a 12-month period following the sector’s second recovery from the COVID-19 lockdown.

UK revenue fell 8.3% to $639.9m (£530.1m) in the second quarter as gross profit fell 4.5% to $83.2m (£68.9m) as new and used car sales volumes fell 18.2% to 11,964 units.

In May, Group 1 revealed record sales and profits in what was described as an ‘outstanding’ first quarter for its car retail businesses in the US and UK .

As a result, UK revenue remains up 5.9% (to $1.32bn, £1.1bn) and gross profit up 16% (to £176.1m). dollars, £145.9m) year-to-date through the end of June.

Year-to-date Group 1 car sales volumes are down 6.2% to 23,216 in the UK.

In today’s business update (July 27), Chairman and CEO Charles Hesterberg focused on recent successes in his US operations. He said: “Our record second quarter results were driven by record US gross revenues and profits.

“Our strength was evident across our US operations, as evidenced by 34% growth in parts and services and a 20.3% increase in financial and insurance services.

“A key contributing factor to our performance has been the extreme speed at which we have been able to integrate a large number of new acquisitions over the past 18 months, which will generate over $3.0 billion in incremental revenue. expected over the coming year.

Commenting on the industry’s vehicle supply outlook, Hesterberg said, “The supply of new vehicles continues to be tight, with no discernible change in the flow of new vehicle deliveries to our dealerships compared to most recent quarters.

“In the United States, we continue to see the majority of new vehicles pre-sold or sold shortly after delivery. In the UK, we continue to maintain a backlog of new vehicles that extends into 2023.”

Last week, AM reported that Group 1 had promoted its chief operating officer Mark Bridgland to chief executive – ending 22 months without a chief executive.

Bridgland will lead the operation of its 75 franchise sites operating from 55 locations across the UK, as well as its 12 accident repair centres.

Group 1 repurchased 799,033 shares during the second quarter, or approximately 4.6% of its common shares outstanding at the start of the current year, at an average price per common share of $173.9 (144. £1), for a total of $139m (£115.2m). During the current year, it has repurchased 1.44 million shares.