Automotive Holdings Group (ASX:AHG)

John McConnell
Market Cap (AUD): 1.22B
Sector: Consumer Discretionary
Last Trade (AUD): 0 +0 (+0%)
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1. About

Automotive Holdings Group Limited is a diversified automotive retailing and logistics group with operations in every Australian mainland state and in New Zealand. The Company is Australia's largest automotive retailer, with operations in Western Australia, New South Wales, Queensland, and Victoria.

AHG's logistics businesses operate throughout Australia via subsidiaries Rand Transport, Harris Refrigerated Transport, Scott's Refrigerated Freightways and JAT Refrigerated Road Services (transport and cold storage), AMCAP (motor parts and industrial supplies distribution), VSE (vehicle storage and engineering), Genuine Truck Bodies (body building services to the truck industry), Higer Bus (bus and truck importation and distribution), and KTM Sportmotorcycles and HQVA (KTM and Husqvarna motorcycle importation and distribution in Australia and New Zealand).

2. Business model


The Company operates in the following divisions:[1]



Revenue ($’000)

% of total Revenue

% of Profit (before Int, Tax, Depn & Amort )

Profit drivers[2]

Automotive Retail




Operating 1 EBITDA was $166.1 M, down 2.9% pcp, delivering an Operating 1 profit before tax of $116.7 M, down 6.0% (pcp) primarily due to the impact of changes to finance and insurance commissions and a slower than expected rebound in the Western Australian market.

Refrigerated Logistics




Revenue and earnings were significantly impacted by the disruption and uncertainty caused by the offer from HNA to buy the business.

Other Logistics




Revenue was down 5.0% to $262.5 M ($276.2m pcp) due to lower motorbike sales and softer automotive parts sales in Western Australia. Operating PBT was $3.8 M, down from $10.5 M pcp largely due to adverse foreign exchange in the import of KTM and Husqvarna product.






3. Strategy


  • Nearterm uncertainty in the broader automotive retail sector from F&I changes, tighter consumer credit and falling house prices[3]
  • Potential mediumterm upside from increased finance penetration
  • Costout opportunities in automotive retail
  • Optimistic medium to longer term outlook based on AHG’s scale and diverse business operations
  • Opportunities for further aggregation in the automotive sector where we see value and as vendor expectations become more realistic
  • Recovery of private buyer demand in WA
  • Car affordability remains at attractive levels
  • Further diversification opportunities in the automotive sector
  • Generating returns from the investment in easyauto123
  • Driving improved performance in RL and OL business units

4. Markets


The Company operates in markets including:[4]


Industry (Australia)

Industry Revenue

Growth Rate (annual 13-18)

Motor Vehicle Dealers

$63 billion (2018)


Motorcycle Dealers

$2 billion (2018)


Motor Vehicle New Parts Wholesaling

$8 billion (2017)


5. Competition


Major competitors include:[5]


  • Super Retail Group Ltd (ASX: SUL)
  • AP Eagers Ltd (ASX: APE)

6. History



Lists on ASX  



Signs Heads of Agreement to acquired McGrath Lander Group

Acquisition of Ford and Mazda Dealerships in New Zealand   



AHG to acquired Queensland Zupps Group for $117 million

AHG Signs Agreement to Distribute Vmoto Scooters



AHG Clarifies Arrangements with GMAC



Extension of KTM Sportmotorcycle Exclusive Importer Agreement



AHG signs Heads of Agreement to acquire  Melbourne Toyota Dealership

AHG acquires strategic development site  



AHG acquires Diesel Motors Trucks

APE: New Carsguide Joint Venture with News Limited

Participation in New Carsguide Joint Venture with News Ltd



AHG acquires NSW and Queensland Truck Dealerships

Successful launch of API Automotive Trust

A.P. Eagers buys 16.3% of AHG

Rand to buy Toll Refrigerated Logistics



AHG Completes New Zealand Acquisition

Completion of Gary McMillan Acquisition

AHG acquires Victorian dealerships



AHG completes acquisition of Bradstreet Motor Group

Successful Completion of AHG's $115m Placement   



AHG completes acquisition of Perth Mercedes-Benz dealerships

AHG to open new Nissan dealership in Brisbane

CHC: Funds $140m acquisition & Group underwrites syndicate

AHG to sell covs parts business

AHG to acquire Perth Mercedes Benz dealerships



AHG completes Daimler Truck Laverton dealership acquisition

AHG completes key Mazda dealership acquisition

Automotive Holdings Group has agreed to extend its sponsorship of the Melbourne Football Club in the AFL   



Automotive Holdings Group has announced that reached agreement in principle to acquire the Ford and Mitsubishi dealerships at the Essendon Fields automotive precinct near Melbourne

New joint venture targets vehicle remarketing and fleet opportunities

Automotive Holdings Group has pleased to announce that it has agreed to acquire five franchised automotive dealerships trading as the Hunter Motor Group at Maitland and Rutherford near Newcastle (NSW)



Automotive Holdings Group (ASX:AHG) has agreed to acquire two franchised automotive dealerships in the southern Auckland suburb of Manukau

7. Team


Board of Directors[7]


Richard England - Chairman

John McConnell – Managing Director

Giovanni (John) Groppoli – Non-Executive Director (Independent)

Greg Duncan OAM – Non-Executive Director (Independent)

Howard Critchley – Non-Executive Director (Independent)

Jane McKellar – Non-Executive Director

Andrea Hall – Independent NonExecutive Director

David Blackhall – Non-Executive Director


Management Team


John McConnell – Managing Director

Adam Irving – Chief Financial Officer (Appointed 1 May 2018)

David Rowland – Company Secretary and General Counsel

read more

8. Financials


2019 Half Year Results Presentation


Financial Year 2017/18 (ended 30 June):[8]



Revenue ($,000)

% Change

Profit (before Int, Tax, Depn & Amort)

% Change

Automotive Retail





Refrigerated Logistics





Other Logistics















9. Risk


Major risks include:[9]


Interest rate risk

In the context of Group activities, interest rate risk arises from exposure in respect of:

  • inventory financing arrangements via its floorplan financing for its dealership group;
  • surplus cash within the Group businesses (including monies on deposit); and
  • specific debt financing as a result of acquisitions or strategic developments of the Group.

The Group’s main interest rate risk arises from its cash and short and long-term borrowings. Borrowings sourced at variable rates expose the Group to cash flow interest rate risk. Borrowings sourced at fixed rates expose the Group to fair value interest rate risk.


Foreign currency risk

The Group is exposed to foreign exchange risk arising from the currency exposures centred on the purchase of inventory (and associated trade payables and finance company loans) and, accordingly, had entered into forward exchange contracts to buy EUR $5.35 million (2017: EUR $5.40 million) as of 30 June 2018.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Group’s functional currency. The risk is measured using cash flow forecasting and sensitivity analysis. The Group’s Treasury Committee assists the Group subsidiaries in managing their foreign exchange risk exposure through the use of forward exchange contracts such as detailed above. All material short-term foreign exchange exposures are hedged and therefore changes in exchange rates will have an immaterial impact on profit or loss or equity.



The Group holds available-for-sale financial assets in DealerMotive Limited and AHG Property Syndicate No. 1 Unit Trust (launched by Australasian Property Investments). These are unlisted securities and units that are immaterial in terms of the possible impact on profit or loss or total equity.



Credit risk is managed at both the business unit and Group level. Credit risk arises predominantly from credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions.


Specifically, the Group’s credit risk arises from:

  • fleet customer purchases where deferred payment terms have been negotiated; and
  • concentration of high volume/frequency fixed operation customers in like industries.



The objective of the Group’s liquidity risk policy is to ensure that it has adequate financing facilities and operating cash flows available to meet its financial commitments. The Group’s liquidity risk management approach is to identify and manage its financial commitments on the following basis:

  • long-term liquidity management involving the structuring of the Group’s statement of financial position and debt maturity profile to protect against liquidity problems in the future; and
  • maintain flexible funding arrangements with financiers so as to allow for additional lines of credit to be established as required.


  1. ^ Annual Report 2018, P 73
  2. ^ Annual Report 2018, P 10-12
  3. ^ Investor Presentation 2018,.P 29
  4. ^
  5. ^
  6. ^
  7. ^
    Annual Report 2018, P 44
  8. ^ Annual Report 2018, P 73
  9. ^ Annual Report 2018, P 102-106