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Group 1 Automotive (GPI - Snapshot Report) has announced the acquisition of Volkswagen of New Port Richey in Holiday, Florida. The company estimates that this new dealership will contribute $34 million to its annual revenues. Moreover, it will expand the company’s geographic footprint in the Tampa Bay metropolitan market and will reinforce its partnership with Volkswagen.
Recently, the company also acquired a Honda Motor Co.’s (HMC - Analyst Report) franchise and a Volkswagen franchise in the Panama City, Florida. These two new ventures are expected to add about $52 million to the company’s annual revenues. Located in Springfield, Florida., the dealerships will operate as Honda of Bay County and Volkswagen of Panama City.
These dealerships will enhance Group 1 Automotive’s geographic presence in Florida. Moreover, the company will reap scale benefits in its operations at the Florida Panhandle. It will also complement the company’s recently renovated World Ford Pensacola dealership.
Group 1 Automotive also acquired Essex Audi Group dealerships in the Southeast region of England. With six Audi franchises, the group will enhance the company’s annual revenues by $275 million. The dealerships are Stansted Audi, Chelmsford Audi, Southend Audi, Harold Wood Audi, Chingford Audi and Docklands Audi. These are located in the affluent Essex and East London region, which is about 90 miles away from the company’s existing dealerships.
Group 1 Automotive posted first-quarter 2012 earnings per share of 97 cents, surpassing the Zacks Consensus Estimate of 89 cents and the year-ago earnings of 64 cents. Profit went up 49.1% to $23.1 million from $15.4 million in the year-ago quarter.
The company’s revenues for the quarter came in at $1.66 billion, up 18.1% from $1.41 billion in the year-ago quarter. Revenues from new vehicles and used vehicles swelled 16.3% and 28.3%, respectively, in the reported quarter.
Headquartered in Memorial City of Houston, Texas, Group 1 Automotive is one of the largest automotive retailers in U.S., offering 31 automotive brands. It has 121 automotive dealerships, 153 franchises and 28 collision centers in U.S. and UK. The company offers new and used cars, light trucks and is also engaged in sales financing activities.
In addition, the company provides insurance contracts, maintenance and repair services along with vehicle parts to its customers. It competes with AutoNation Inc. (AN - Analyst Report) and Penske Automotive Group Inc. (PAG - Analyst Report). Currently, the company retains a Zacks #2 Rank, which implies a short-term Buy rating.
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