September 29, 2023

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Group 1 posts record Q4 revenue

Team 1 Automotive Inc. mentioned Thursday that income rose to record levels in the fourth quarter, even as the dealership group navigated operational challenges brought on by the pandemic and stock constraints.

The community retailer dependent in Houston noticed profits in the quarter increase 19 percent to $3.49 billion, helped by robust client need for cars and by its areas and assistance enterprise. The firm’s web profits fell 13 % for the quarter to $87.1 million, although that figure includes a net decline from operations in Brazil. Team 1 designs to divest the Brazilian operations in the 2nd quarter of this year, and the device is now reported as discontinued operations.

Web earnings from continuing operations, which incorporates Group 1’s U.S. and United Kingdom functions, rose 65 p.c to $163.2 million in the quarter.

The dealership group’s new-vehicle retail sales slipped 3.5 p.c amid a world scarcity of microchips that has slowed production of new types. Group 1 experienced just a 9-day supply of new autos in the U.S. as of Dec. 31, compared with a 48-working day provide as of Dec. 31, 2020. Supply of employed autos in the U.S. was up slightly 12 months above 12 months, to 36 days at calendar year end.

“2021 was a further record year for Team 1 Automotive, driven by potent automobile profits demand powerful margins owing to car offer constraints double-digit advancement in aftersales, as miles pushed have recovered and ongoing robust cost command, as we advantage from system and staff efficiencies recognized throughout the pandemic,” Group 1 CEO Earl Hesterberg explained to analysts Thursday on the company’s fourth-quarter earnings connect with.

Group 1 reported it obtained 3 dealerships in October — two in Texas and one in California — that the firm suggests ought to crank out roughly $235 million in annualized earnings. But most of the retailer’s expansion previous calendar year stemmed from its November purchase of practically all of the property of Key Automotive Group, which include 28 dealerships symbolizing 41 franchises, additionally three collision centers. Team 1 explained the Key purchase as its greatest-ever acquisition.

Group 1 reported the Key retailers are anticipated to make $1.8 billion in annual profits, producing up the bulk of an predicted $2.5 billion in obtained annual income in 2021. The retailer said it also disposed of dealerships symbolizing six franchises very last yr, ensuing in a internet $2.3 billion of predicted obtained annual income. The acquisitions carry Group 1’s world wide dealership depend to 202 suppliers, excluding Brazil.

The retailer designs to provide its functions in Brazil, with the transaction expected to near in the 2nd quarter, Hesterberg mentioned. Team 1 explained it expects to get a noncash charge of $77.5 million on the sale, associated to exchange level translation changes.

For the total 12 months, Team 1 claimed larger revenue and a near doubling of internet income.

Shares of Team 1 traded down 5.4 % to near at $166.32 Thursday.

Q4 revenue: $3.49 billion, up 19 p.c from a year previously

Q4 net profits: $87.1 million, down 13 % from a calendar year previously

• Q4 altered web income from continuing operations: $169.9 million, up 65 p.c from a year before

Q4 new-car or truck product sales: 35,573, down 3.5 % from a 12 months previously

Data: Fourth-quarter profits altered fourth-quarter earnings for every share from continuing operations

2021 revenue: $13.48 billion, up 27 per cent

2021 web earnings: $552.1 million, up 93 percent

2021 altered internet money from continuing operations: $633.7 million, up 90 per cent from 2020

2021 new-automobile gross sales: 146,072 vehicles, up 8.4 p.c

Ranking: Team 1 rated No. 4 on Automotive News‘ most current list of the prime 150 dealership groups primarily based in the U.S., with retail profits of 140,221 new vehicles in 2020.