The integration of Stobart Automotive and Paragon Automotive at BCA Marketplace as its Automotive Services division is “progressing well” after seeing major increases in turnover and EBITDA in the first half of its financial year.
BCA Marketplace bought Stobart Automotive (formerly Autologic) from Eddie Stobart Logistics in August 2015, and in June it bought Paragon Automotive for £105m – with Stobart having previously sold Autologic’s automotive after-sales decision to Paragon in 2013.
The two now form part of a new division at BCA Marketplace - BCA Automotive Services – and sit alongside the BCA Logistics business previously reported within its UK vehicle remarketing division and its third acquisition in the past 12 months – car preparation firm Ambrosetti.
The directors report said that as a result of the three acquisitions BCA now offered from handling new vehicles at the point of entry into the UK; new and used car delivery either in bulk or singularly; inspection; imaging; refurbishment; and the valuation and remarketing of used vehicles.
“We are the market leader in this area, with the capability to offer a volume solution for automotive OEMs, corporate fleets and dealers. We believe that there are significant organic growth opportunities for the group in the future,” it added.
“Paragon is a natural fit into the group and plays a key role in our strategy to develop innovative solutions for our customers and deliver a range of automotive services across the vehicle life cycle.”
In the 18 months since the original BCA business acquisition, the group has made significant progress in broadening its offering into complementary vehicle services in line with our stated strategy and there remain opportunities for further expansion in both the UK and continental Europe.
As a result for the first six months of its financial year (ending 2 October) turnover rose to £119.4m, up 236.3% from £35.5m when compared to the six months ending 4 October 2015. BCA said its prior period comparatives had been re-presented to reflect the new operating divisions – including automotive services.
Adjusted EBITDA rose from £2.6m to £6.4m in the same period.
In its half year report BCA said that the ongoing integration programme of its logistics network, including branch transport, single and multiple vehicle movements and the movement of vehicles to and from our technical centres, was “progressing well”.
It added that during the first half of its financial year it had also increased the number of our own transporters dedicated to serving the auction branch network, which it said had improved efficiencies and reduced its dependency on third parties.
Furthermore it said that it had rebalanced its workforce towards self-employed and employed drivers, rather than agency drivers as it looked to address cost pressures in its logistics business.
Finally, it also rolled out a hub and spoke network model in the six month period, which it said would enable it to use its own fleet for longer distance moves. “We are seeing profitability improve as a result of these actions,” the report said.
