Group 1 Automotive has revealed record turnover and profits in an ‘outstanding’ Q1 for its car retail operations in the US and UK.
Revenues rose 30.1% during the period to the end of March to reach an all-time high of $3.8 billion (£3.03bn) as net income from continuing operations hit a record $201.1m (£160.3m) – a 99.3% increase year-on-year.
Commenting on the Q1 2022 result, Group 1 president and chief executive Earl J. Hesterberg said: “Our record profit performance this quarter was the result of continued strong consumer demand and outstanding operational performance across all business segments in the US and UK.
“Our 2021 acquisitions, especially the Prime Auto Group, performed far above our expectations in the first quarter and our UK operations achieved an all-time profit record.
“Service growth and cost leverage were noteworthy in both the US and UK with U.S. service growth of 18.6% over last year on a same store basis and consolidated adjusted SG&A down 381bps over last year.
“We expect our strong vehicle sales margins to continue this year in both markets as new vehicle supply is expected to remain constrained for the remainder of this year.”
On a same store basis, new vehicle margins rose by 6.4ppts to 11.4% as unit sales declined by 14.2% to 30,260 and used car margins rose by 6.4ppts to 6.2% as unit sales increase by 0.9% to 37,415, Group 1 reported.
The group operates a total of 202 locations, 55 of which are in the UK following the 2021 acquisition of nine-dealership business Robinsons Motor Group.
During the first quarter of 2022, the business grew across the Atlantic with the acquisition of Toyota of North Austin, which is ranked in the top 20 nationally in Toyota new vehicle volume, and a Toyota dealership in New Mexico.
In February, Group 1 disposed of one Honda and one Toyota dealership in the New England area. It has also announced the pending sale of its Brazilian operations.
Commenting on the group’s recent acquisitions, Daryl A. Kenningham, Group 1's president of US operations, said: "The acquisition of these two large Toyota dealerships in growing markets where we already operate is a major growth opportunity for our US operations. We can integrate and leverage these new businesses immediately.”
Group 1 has also continued a share buyback pro0gramme. Its trading update said: “During the current quarter, the company repurchased 638,696 shares, representing approximately 4% of the company's current quarter beginning outstanding common shares, at an average price per common share of $180.30, for a total of $115.2 million.
“The Company has $103.3 million remaining on its board authorized common share repurchase program. As of March 31, 2022, the Company had an aggregate 16.7 million outstanding common shares and unvested restricted stock awards. Future repurchases may be made from time to time, based on market conditions, legal requirements, and other corporate considerations, in the open market or in privately negotiated transactions, and subject to Board approval and covenant restrictions.”