TORONTO – Shares in AutoCanada Inc. (TSX:ACQ) rose sharply Friday, a day after Canada’s largest publicly traded auto dealership owner and operator reported strong earnings and vigorous expansion plans.
On the Toronto Stock Exchange, AutoCanada shares climbed $4.35 $54.99, an increase of or 8.59 per cent in the wake of what the company said was a record year for sales and earnings.
AutoCanada said 2013 net earnings increased by $13.9 million or 57.5 per cent to $38.2 million from $24.2 million. That translated into net earnings per share of $1.83 versus $1.22 per share in 2012, a 50 per cent increase.
Revenue increased by just under 28 per cent to $1.4 billion from 1.4 billion, while same-store revenue increased by 17.2 per cent.
“2013 was a record year in terms of sales and earnings for AutoCanada due to the six dealership acquisitions completed and double-digit growth in same-store sales and gross profit during the year,” CEO Pat Priestner said in the company’s earnings report.
In its guidance update for the year, the company said that over the last 15 months it had become apparent that the “Canadian dealer succession issue which industry analysts have been forecasting over the past number of years is beginning to materialize.”
“As such, the company has experienced a significant increase in the number of interested sellers of auto dealerships in Canada and has noticed that many of these opportunities are large, more profitable premium dealerships.”
In recognition of the increased activity, the company said management was raising its guidance to 10 to 12 dealership acquisitions over the coming 24 months.
“Should the company be able to acquire a larger group, this would increase the guidance, it added.
AutoCanada, with about 1,600 employees, currently operates 28 wholly-owned franchised dealerships and manages five franchised dealership investments in seven provinces.