Group 1 Automotive Inc. said Wednesday that first-quarter net profit nearly doubled and revenue soared as dealerships the retailer acquired last year beat expectations.
The Houston-based dealership group said revenue for the quarter ended March 31 rose 30% to $3.84 billion, driven by growth in used vehicles, finance and insurance and parts and service. Group 1 has acquired dozens of franchise dealers since the end of the first quarter of 2021, including 28 stores from Prime Automotive Group at the end of last year. On a comparable basis, Group 1 sales in the first quarter increased by 11%.
The company’s net profit rose 99% for the quarter to $202.9 million, a figure that includes its operations in Brazil. Group 1 plans to divest the Brazilian operations by the end of June, and this unit is now presented as a discontinued operation.
Net income from continuing operations, which includes Group 1 operations in the US and UK, increased 99% to $201.1 million in the quarter, a record high.
“Our record earnings performance this quarter is the result of continued strong consumer demand and exceptional operating performance across all business segments in the US and UK,” the CEO said. of Group 1, Earl Hesterberg, in a statement. “Our 2021 acquisitions, in particular the Prime Auto Group, performed well above our expectations in the first quarter and our UK operations achieved an all-time profit record.”
Hesterberg added that he expects strong margins on Group 1 vehicles to continue this year in both markets as the supply of new vehicles remains limited for the remainder of 2022.
Group 1 had a nine-day supply of new vehicles in the United States at the end of March, which was unchanged from December 31, but down from a 34-day supply on March 31 2021. US used vehicle supply increased year-over-year to 28 days as of March 31, from 23 days a year earlier, but down from 36 days at the end of 2021.
Group 1 in March acquired Charles Maund Toyota in Austin, Texas, which it renamed Toyota of North Austin. The company said the store is expected to generate $435 million in annualized revenue. Group 1 this month acquired Larry H. Miller Toyota Albuquerque, New Mexico from Asbury Automotive Group Inc. and renamed the store Sandia Toyota. New Mexico dealership expected to generate $115 million in annualized revenue
“The acquisition of these two large Toyota dealerships in growing markets where we already operate is a major growth opportunity for our US operations,” said Daryl Kenningham, president of Group 1 US operations, in the company’s statement. .
Group 1 in February sold Ira Honda in West Roxbury and Ira Toyota of Tewksbury, both in Massachusetts, to Terry Taylor’s Automotive Management Services Inc. The two stores had generated about $125 million in annualized revenue, the group said 1.
1st quarter turnover: $3.84 billion, up 30% from the previous year
Q1 net income: $202.9 million, up 99%
Net income from continuing operations for the 1st quarter: $201.1 million, up 99%
Vehicle sales in the 1st quarter: 29,498 new vehicles in the United States, up 1.2%; 33,940 used vehicles, up 12%. On a comparable basis, new vehicle sales in the United States fell 17% to 23,769, while used vehicle sales fell 3.8% to 28,901.
Recordings: Quarterly turnover; net income from continuing operations
Ranking: Group 1 ranked n°4 in Automotive News‘ Most recent list of the top 150 U.S.-based dealer groups, with retail sales of 146,072 new vehicles in 2021.