Armstrong considers new capital structure to accelerate long-term growth plans

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November 9, 2021 – Armstrong’s, one of New Zealand’s largest private automotive groups, is reviewing its capital structure and considering dual listing on the main board of the New Zealand Stock Exchange (NZX) and the Australian Stock Exchange (ASX) in 2022 .

Founded by Rick Armstrong in 1993 and now headed by CEO Troy Kennedy, Armstrong’s operates 15 strategically located dealerships and represents 16 global automotive brands in the Dunedin, Christchurch, Wellington and Auckland markets.

Armstrong CEO Troy Kennedy said, “The business is at scale with the right systems and the leadership team in place to gain a foothold on emerging opportunities as the New Brunswick vehicle fleet Zealand is starting to undergo significant structural changes in the race to put in more. Emission vehicles (EVs) on the road.

“We have an enviable brand portfolio built on long-term, trusting relationships with global automotive brands. We see growth from two angles: organic growth linked to the constitution and diversification of the brand portfolio, combined with growth through tailor-made real estate development plans in the Christchurch, Wellington and Auckland markets. “

“With nearly three decades of experience under our belt and a founders-led culture rooted in our business partners and clients, now is the time to explore dual listing in order to access external capital and accelerate our growth ambitions for the next 30 years. , adds Kennedy.

Overview of operation

Armstrong’s revenues are diversified between new and used vehicle sales, parts, maintenance, finance, insurance and distribution. Armstrong sold approximately 12,000 vehicles in its last fiscal year and proudly represents 16 global automotive brands: Alfa Romeo, Audi, Citroën, Fiat, Hyundai, Jaguar, Jeep, Land Rover, Mercedes-Benz, Nissan, Peugeot, Porsche, RAM , Subaru, Toyota and Volvo.

The interests associated with the founder, Rick Armstrong, have a large real estate portfolio comprising several of the Group’s concessions and a number of potential future development sites for the Group.

As part of the review of the capital structure, Armstrong’s is considering purchasing these properties. Since 2019, the Group’s revenue has grown steadily to $ 448 million and is expected to exceed half a billion dollars in fiscal 22, with strong EBITDA growth also recorded during this period. Armstrong’s today employs over 500 people with its head office based in Auckland.

Impact of Covid-19

In response to the Alert Level 4 lockdown in 2020, Armstrong’s experienced a significant impact on its operations, but has since seen a resilient response from customers, who are increasingly comfortable making transactions. by phone and / or online, in particular by committing directly to Alert Level 3 and Alert Level 2 Requirements.

As a result, the company continues to trade well below expected expectations. The company continues to experience strong customer demand for REVs in response to the initial phase of the government’s clean car rebate. Armstrong’s brand portfolio also means that the Group is well positioned to meet a large and diverse customer demand for REVs.

In 2021, Armstrong’s launched a series of initiatives in direct response to New Zealand’s border closures and lack of access to skilled labor abroad. Since the onset of COVID-19, Armstrong’s has employed 20 apprentices – creating paths to highly skilled, well-paying career paths. The program focuses on training and developing the next generation of automotive technicians to service a growing REV fleet.

Overall, Armstrong’s maintains a cautiously optimistic business outlook and its centralized group operating structure positions the Group to act quickly to take advantage of acquisition and development opportunities in the current environment.

Schedule

Armstrong intends to decide on a final capital structure, including a possible NZX / ASX double listing, in 2022. Jarden and UBS have been engaged to support this process. Further updates will be shared with staff and external stakeholders over the coming months.

© Scoop Media


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