Tuesday Ticker: May 10, 2022

Toronto, Ontario ⁠— In this weekly Tuesday Ticker, AutoCanada picks up two luxury dealerships in Ontario, teasing the potential to expand its collision services; Uni-Select reports a “strong start” to the year with its Q1 2022 financial results, and a Toronto-based parts maker sees big drops in net profits.

Leaning on luxury
AutoCanada added two luxury dealerships to its portfolio last week; the Edmonton-based group acquired Porsche of London and Audi of Windsor last week for an undisclosed price.

The dealerships, owned by Southwestern Ontario-based Leavens Automotive Group, generate more than $80 million in revenues annually, said AutoCanada. Both the facilities are recently-built, the company added.

AutoCanada also said the acquisition unlocks additional growth opportunities⁠, including “the potential to expand AutoCanada’s collision centre footprint in each of the markets,” it wrote in its acquisition announcement.

AutoCanada currently touts 78 franchised dealerships comprised of 28 brands and operates in eight Canadian provinces in addition to a group in Illinois, U.S.A. In 2021, the company says its dealerships sold approximately 86,000 vehicles and processed more than 800,000 service and collision repair orders, generating revenue in excess of $4.5 billion.

‘Strong’ start to 2022
Uni-Select reported its Q1 2022 financial results last week, citing a “very strong start to the year,” with sales up 10.7 percent to $409.6 million, adjusted EBITDA up more than 50 percent to $7.7 million.

The Boucherville, Québec-based company said consolidated sales were driven by organic growth of 11.6 percent, with all three segments⁠—FinishMaster, Canadian Automotive Group and GSF Car Parts U.K.—reporting positive organic growth⁠ ranging between 9.2 percent and 14.8 percent⁠ for the quarter.

The FinishMaster U.S. segment reported sales of $172.8 million, with organic growth of 9.2 percent driven by general market recovery and price increases, while the Canadian Automotive Group segment reported sales of $129.8 million, an increase of 12.7 percent largely driven by organic growth of 12.2 percent and acquisitions over the last twelve months.

The GSF Car Parts U.K. segment reported sales of $107.1 million, an increase of 10.7 percent mainly driven by organic growth of 14.8 percent offsetting an unfavourable fluctuation of the British pound against the US dollar during the first quarter of 2022.

Uni-Select said it still expects sales and profitability to improve in 2022, compared to 2021, adding that the magnitude of improvement will likely be greater in the first half of 2022.

“[This is] due to the timing of certain rebates as we begin to lap certain operational improvements implemented in the back half of 2021 while continuing to navigate ongoing supply chain and labour issues,” wrote the company.

“Our priorities for 2022 will be to continue to focus on organic growth and drive operational improvements across each business unit.”

Martinrea makes some moves

Martinrea International says its net profits dropped 35 percent in Q1 2022, despite higher revenues for the Toronto-based auto parts manufacturer.

Martinrea reported earnings of $25.2 million, compared with $38.7 million in the same quarter of 2021.

Adjusted net earnings were $24.8 million, or 31 cents per share, down 24 percent from $32.6 million or 41 cents per share in Q1 2021.

Analysts expected Martinrea to report 11 cents per share in adjusted earnings on $997.3 million of revenues, according to Refinitiv.

Martinrea stated the results were better than 2021’s third and fourth quarters thanks to lower levels of semiconductor-related production shutdowns and customer call-offs during the quarter.

The company is also experiencing its highest level of new business launch activity in its history, CEO Pat D’Eramo said in a news release.

The company remains confident in its 2023 outlook, it said, including expectations of more than $200 million in free cash flow.


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