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Motor World follows rival Halfords to stock market

Motor World is planning to follow Halfords on to the stock market with a flotation some time later this year to provide the funding for growth. It is not yet clear how much cash the company hopes to raise, but initial reports suggest it could be valued at around £80m.

The company says it is enjoying strong sales, and wants to expand its number of stores. Aftermarket analyst Brian Taylor believes Motor World and Halfords are benefiting from the ageing vehicle parc.

“Accessory shops tend to deal with the owners of older cars. With today’s vehicles lasting longer, and with owners keeping them longer, sales of accessories are likely to increase,” he says.

Motor World was formed in 2000 when management led by John Moussell bought the business from parent company Finelist, which went into receivership. With 230 outlets around the UK, it is the second biggest car parts and accessories chain after Halfords. It has appointed Clearwater Corporate Finance to advise on the flotation.

Halfords raised gross proceeds of £266.7m from its initial public share offering earlier this month. The shares were sold at 260p each, broadly in line with expectations, valuing the company at £593m. The net proceeds of about £135m, together with an estimated £195m of borrowings under new bank facilities and available cash balances, will be used to reduce debt.

The CVC Capital Partners company, which has 387 stores in the UK, expects to achieve £578.6m turnover in 2004 (£525.8m in 2003), and £79.2m operating profit before goodwill and exceptional costs (£50.8m in 2003).

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