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SCHAEFFLER REVENUES DOWN IN ‘PERSISTENTLY DIFFICULT’ MARKET

SCHAEFFLER REVENUES DOWN IN ‘PERSISTENTLY DIFFICULT’ MARKET

Automotive components and systems manufacturer Schaeffler has published its financial report for the first half of the year. 

Company revenue, reported as €7.2 billion euros for the first six months, decreased at constant currency by 0.8 percent in what the report referred to as a ‘persistently difficult market environment’. This was driven largely by the automotive divisions, while the industrial division saw some revenue growth. 

Meanwhile, the firm’s earnings before interest and taxes (EBIT) margin was 7.7 percent compared with the prior year’s 11.0 percent margin, with the decrease attributed to a decrease in gross margin and higher expenses. However, this did improve from 7.5 percent in the first quarter to 7.9 percent in the second. 

READ: SCHAEFFLER PLANT SOLD IN MBO

The Automotive OEM division saw revenue of approximately 4,514 million euros for the first half of this year, with the firm claiming a drop of 2.9 percent on last year in constant currency. Though the company did say that ‘order intake was very encouraging in the first six months, totaling 7.7 billion euros’ and that the E-Mobility business division won a 1.1 billion euro supply contract.

Schaeffler’s Langen HQ

Similarly, the Aftermarket division also reported a revenue of 905 million euros, a drop of 2.4 percent at constant currency, attributed to a ‘considerable decline in revenue in the Europe region’. EBIT before special items was reported as 136 million euros compared to 177 million euros in the prior year, while EBIT margin before special items was 15.1 percent, down from 19.3 percent in the prior year. 

READ: SCHAEFFLER’S NEW DATA DIVISION

Dietmar Heinrich, CFO of Schaeffler, said the company is ‘increasingly successful in managing our use of capital more efficiently,’ and noted: “In the second half of 2019, we will focus on even stronger discipline regarding cost and capital and on generating cash flow. 

Meanwhile, Klaus Rosenfeld, CEO of Schaeffler, noted the ‘persistent weakness’ of the global automotive business, and said: “Following a difficult first six months that fell slightly short of our expectations, we believe that the market environment will remain challenging in the second half of 2019 as well.

“We have acted on this trend by adjusting our full-year guidance for 2019,” he said. 

 

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OBITUARY: KEVIN SHORTIS 1939-2019

Accessory shop owner and entrepreneur Kevin Shortis has died following a short illness.

While he was involved in a number of businesses, Shortis will be best remembered by the aftermarket for his chain of accessory shops, latterly called Wilco Motosave.

Kevin Shortis 1939-2019

Shortis started work in the late 1950s as a teenager. Originally he worked for parts distributor Vic Moore Car Spares in Lancashire. “Back then there were no accessory shops. If you wanted something, you went to a garage. But they had to sell you the parts at the rate the manufacturer dictated” he told CAT in a 2010 interview.

Sensing a gap in the market, Shortis set up a shop aimed at DIY motorists. In an age where a new generation of first-time car owners liked to maintain and fit accessories to their vehicles, the business did well and before long several more branches were opened across East Anglia.  

Such success came to the attention of aftermarket magnate Quinton Hazell, who bought Shortis out. Shortis took a place on Hazell’s board, but the relationship was short lived due to the sale of QH to Burmah and in the mid 1970s he took the opportunity to buy several of his stores back.

Steady growth occurred in the decades that followed, with the acquisition of Leeds-based Motosave in 2004 more than doubling the size of the network.

In 2010 Shortis won the Lifetime Achievement trophy at the CAT Awards. However he never retired and continued to work in the business with his son Richard.

Kevin Shortis signed off the last email he sent to us at CAT with the words: “I never get bored, but since I started in the trade I reckon I’ve seen everything!”

He will be sorely missed by all that knew him.

 

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PROFITS SLUMP AT HALFORDS FOLLOWING MILD WINTER

PROFITS SLUMP AT HALFORDS FOLLOWING MILD WINTER

Halfords PLC, the company behind the retail chain and auto centres as well as specialist cycle shops Treadz and Cycle Republic, has announced its results for the year ending in March 2019.

Underlying profit before tax was down £12.8m on last year to £58.8m.

Halfords

Profits down at Halfords following a mild winter

Chairman Keith Williams noted a ‘disappointing fall in profit vs expectations’ which he put down to a mix of Brexit uncertainty and a mild winter. CEO Graham Stapleton expanded that the drop was also due to ‘weakened consumer confidence’ in the run up to Christmas, retail cost inflation as well as investment in ‘strategic opportunities’, such as the opening of a Boardman Performance Centre. The report also noted that operating costs both in retail and in the auto centres had increased, further reducing profitability.

However, it wasn’t all bad headlines for the retailer. Like-for-like cycle sales grew modestly, net debt was reduced by £6m to £81.8m and total Autocentres revenues were up £2.6 percent. Battery, bulb and blade fitting services at the retail outlets were also showing positive growth.

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EXCEL AUTOMOTIVE GROUP ACQUIRED BY AUTOELECTRO BOSS

EXCEL AUTOMOTIVE GROUP ACQUIRED BY AUTOELECTRO BOSS

Component supplier Excel Automotive Group (EAG) has been acquired by Sancorp Ltd, a holdings company owned and operated by Autoelectro MD Tony Bhogal in partnership with his son Harry.

Terms of the deal have not been disclosed.

The company, originally known as Excel Components started in 2003 providing aftermarket steering and suspension components. The company changed hands in 2015 and was sold again in 2017 to TVS Ltd, the parent company of CV supplier Universal Components Ltd.

READ: JUST BOOTS ACQUIRED BY CONTINENTAL DIRECT

The most recent sale will see the company relocate to a new site in Leeds in due course. The Bhogals have appointed former EAG Sales Director Adrian Lamb to the role of Managing Director while Harry Bhogal will handle the day-to-day operations.

READ: AUTOELECTRO AND CAAR SIGN DEAL

Tony Bhogal

“I am delighted to be at the forefront of this new chapter in EAG’s history,” said Lamb. Thanking existing customers for their patience and support he added: “I believe the company has unfinished business, and while the industry has evolved significantly over the years, with the support of Tony and Harry, I am confident we can return the brand to its former glory – we’ll certainly give it a go.”

 

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AAG ACQUIRES MAJOR EUROPEAN DISTRIBUTOR

AAG ACQUIRES MAJOR EUROPEAN DISTRIBUTOR

Alliance Automotive Group (AAG) has agreed to acquire Netherlands-based PartsPoint Group. 

PartsPoint Group, currently a subsidiary of family-owned AutoBinck, has activities in the Netherlands and Belgium. It operates a network of 150 branches under the network banners of Brezan, Staadegaard-TC and Dabeko. The company also serves 60 independent wholesalers through its national and regional distribution centres. It has annual revenues of approximately €300 million.

Jean-Jacques Lafont, CEO of AAG said “PartsPoint has a leading market position in the two key European markets of The Netherlands and Belgium markets which are contiguous to our existing operations. It is run by a superb management team which I am sure will develop further growth opportunities in its markets. We are pleased that the PartsPoint management team is committed to staying on board to lead the company into this next phase of its development”. 

Cor Baltus, CEO of PartsPoint said “We are grateful to AutoBinck which supported us during our rapid expansion. With their trust and confidence, we have been able to relaunch the business since 2013. We are pleased to become a part of one of the leading aftermarket groups in Europe which will enable us to continue to grow and to invest in marketing, IT and product development to service our customers even better in the years to come”. 

The transaction is subject to customary closing conditions including the relevant regulatory approvals and consultation with unions. 

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NEWS: RAC AND EURO CAR PARTS MERGE GARAGE SCHEMES

NEWS: RAC AND EURO CAR PARTS MERGE GARAGE SCHEMES

RAC and ECP shake on network deal

A deal has been signed between the RAC and Euro Car Parts in order to merge the RAC Approved Garage network with ECP’s Autofirst.

The new entity will be known as ‘RAC Approved Garages powered by Autofirst Network’ . As the combined number in both networks is in excess of 500 branches, RAC auto first can claim to be the UK’s largest garage network.

READ: FORMER ECP DIRECTOR ANNOUNCED AS HEAD OF SPICERS

As part of the network, each garage will be jointly branded, carrying the prominent RAC and Autofirst Network branding. The partnership, which aims to ensure customers are only ever a few miles from an RAC Approved Garage, will offer consumers all the benefits of a local garage, combined with a national warranty.

By subscribing, garages will also be offered repairs referred to them by RAC patrols from breakdowns through the company’s Accredited Repairer scheme. 

RAC Chief Executive Dave Hobday said: “We know from market research that customers really value the friendly, local and reliable service provided by independent garages and have a very high level of trust in the RAC so this is the perfect recipe for garages looking to stand out from the crowd in a busy marketplace.”

READ: ANDY HAMILTON APPOINTED ECP CEO

Andy Hamilton, Euro Car Parts Chief Executive, added: ““We believe the brands are an excellent fit and have the potential to become a first choice for consumers wanting the trust of big brands but with local service and convenience”.

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BREAKING: LKQ CONFIRM SUKHPAL RESIGNATION

BREAKING: LKQ CONFIRM SUKHPAL RESIGNATION

LKQ Corp, the owner of Euro Car Parts has confirmed that it has accepted the resignation of Executive Chairman Sukhpal Singh Ahluwalia.

The founder of ECP, known simply by his first name to all in the business, sold the company to the US-based parts giant in 2011, remaining as an Executive Director.

The conformation follows reports that Sukhpal, Martin Gray, Steve Horne and other senior management walked out of ECP last week over the subject of proposed cuts by LKQ.

READ: ANDY HAMILTON SUCCEEDS MARTIN GRAY AS EURO CAR PARTS’ CEO 

Sukhpal commented, “ECP has been my life’s work and there will always be a bit of the company in me. I have enjoyed my relationship with LKQ but the time has come for a change so I can devote my full abilities to building the property business with my sons. I am confident in the strategy LKQ has for its European segment and for the next level of growth and operational excellence at ECP.”

Dominick Zarcone, President and Chief Executive Officer of LKQ Corporation, stated, “Sukhpal has been a key partner with LKQ over the past seven years as we have quadrupled the size of our business in the U.K., and he has served as a valued LKQ board member. While we will miss his insights, we respect his desire to spend all his time focused on the family property business and wish him nothing but the best in those endeavours.”

READ: BOARD WALKOUT AT EURO CAR PARTS

Sukhpal has resigned from the company he founded in 1979

This is not the first time that Sukhpal has left ECP while under LKQ ownership. However, he left in 2014 amid rumours that he had fallen out with the parent company and was planning to start a new factor chain to be called APX. These rumours took on substance when a recruitment advert appeared in CAT. Shortly after Sukhpal and several dozen other former Euro Car Parts’ employees agreed to return to ECP under new terms.

 

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BREAKING: WALKOUT AT EURO CAR PARTS

BREAKING: WALKOUT AT EURO CAR PARTS

Sukhpal Singh Ahluwalia and Martin Gray have reportedly quit Euro Car Parts amid concerns that parent company LKQ is planning to axe hundreds of jobs. CFO Steve Horne has also reportedly left his post.

Sources close to CAT suggested that 400 jobs are to be axed. The news comes just days after LKQ announced the appointment of Ard Franz as COO of LKQ Europe.

In October we spoke to Mr. Ahluwalia and Mr. Gray about the future of the business, particularly now its main competitors are no longer local independent factor groups, but are other similar stock-market listed businesses with North American parent companies.

NASDAQ-listed LKQ’s share prices have dropped significantly compared with the previous period.

Gray, Ahluwalia and LKQ have been contacted for comment.

More on this breaking story as it develops

ECP’s 75th branch

 

 

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DUTCH TRADE BODY TALK BREXIT WITH IGA

DUTCH TRADE BODY TALK BREXIT WITH IGA

Dutch garage trade group BOVAG (BOnd Van Automobielhandelaren en Garagehouders)  – has completed a nationwide tour of British garages to discuss future working relationships ahead of Brexit.

The BOVAG team joined up with the Independent Garage Association (IGA) during the trip. The visitors gained insight into the management of British independent garage businesses and discussed issues affecting the industry including MOT testing and access to technical information. The groups also discussed Brexit and the implications for their working relationship.

Stuart James, Director of the IGA said: “This co-operation with our European colleagues is a positive step towards maintaining strong partnerships throughout and beyond the Brexit process.”

Meanwhile, Gerard ten Buuren, Chair of BOVAG’s Independent Garage Division, said the team “gained a tremendous amount” from the visit and is “delighted” to continue working alongside the IGA.

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DCS LEATHERHEAD BECOMES LATEST AAG ACQUISITION

DCS LEATHERHEAD BECOMES LATEST AAG ACQUISITION

Leatherhead-based Discount Car Spares has been acquired by AAG, parent company of the GroupAuto buying group.

The factor was established in 1989 and has two branches. John and Gary Syrett and Robert Herman were Directors.

DCS was an existing GroupAuto member and participated in group promotions, such as the AutoCare network. Last year the factor presented customer Shirley Garage with a prize for becoming the 600th member of the scheme.

The news follows last week’s announcement that AAG had acquired nine-branch Lloyds Motor Factors 

 

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