Group 1 Automotive Inc. (GPI) announced the completion of acquisition of Essex Audi dealership in the southeast region of England. The dealership consists of six Audi franchises including Stansted Audi, Chelmsford Audi, Southend Audi, Harold Wood Audi, Chingford Audi and Docklands Audi. The dealership will expand the luxury brand offering of the company in the United Kingdom, from the existing five BMW/MINI dealerships. It is located in the affluent part of Essex and East London, which is 90 miles away from other dealerships, and expected to generate annual revenues of $275 million.
Audi is the market leader in luxury vehicles in the United Kingdom. Therefore, Group 1 Auto's partnership with Volkswagen (VLKAY) group for the brand will generate scale benefits and growth for the company.
Group 1 Automotive posted earnings per share of 97 cents in the first quarter of 2012, surpassing the Zacks Consensus Estimate of 89 cents and year-ago earnings of 64 cents. In absolute terms, profits were up 49.1% to $23.1 million compared with $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 vehicle increased 16.3% to $912.6 million and used vehicles hiked 28.3% in the reported quarter.
Group 1 Automotive is one of the largest automotive retailers in U.S. The company offers new and used cars and light trucks with 31 brands of automobiles. It also facilitates vehicle financing, insurance, maintenance and repair services.
The company operates 118 automotive dealerships, 150 franchises and 28 collision centres in the U.S and U.K. and focuses on the acquisitions of Toyota Motor Corporation (TM), Honda Motor Co. (HMC), BMW and Mercedes Benz franchises. Currently, it retains a Zacks #2 Rank, which translates into a short-term Buy rating.
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