In reaction to the Prescience report on ECP/LKQ, the company has provided the following comment from its senior management team.
Comment from Martin Gray CEO, Euro Car Parts
Euro Car Parts Ltd, is continuing to grow strongly under my stewardship. I head up a team of ECP Directors – I consider them to be the best in the business – completely unchanged for over 4 years. We are seeing strong growth in our share of the UK independent motor trade market, itself a growing sector, both from long-established and newer branches.
The increased leverage of fixed costs continues to improve our profitability and has enabled us to continue to invest strongly in our people – the ECP Team has increased by over 1,000 colleagues in the past year – in our staff training, in our IT, in our stock ranges and in our logistics. We have increased our central distribution warehousing to over 1 million sq.ft. and added 3 new regional hubs. Together with strong backing from our parent company, LKQ Corporation, this has allowed us to open many large new ECP branches, 8 so far in 2014, bringing excellent availability, service and value to the front doors of lots more garages and bodyshops.
Bodyshops’ profitability has also benefitted from a large increase in purchases of our Platinum Plus ranges of certified collision repair parts. Our relationship with bodyshops has been enhanced by the acquisition of 5 leading paint distributors last August, making us clear market leader. We are now working hard on synergies with ECP’s Purchasing, Logistics, IT etc. to produce tangible advantages for our customers.
Sukhpal Singh Ahluwalia, Chairman Euro Car Parts and LKQ Europe
CAT’s Editor, Peter Lawton, has asked me to comment on a paper about LKQ Corporation issued on 15th January by a Wall Street ‘short-seller’ called Prescience Point. In my view (a view shared by the EU who have recently introduced regulations to control it in Europe) short-selling is a dubious practice whereby the ‘short-seller’ can profit by causing a fall in the share price of a listed company.
I do not propose to comment myself on the many spurious accusations made by Prescience, but instead have sent Peter two very detailed reports on LKQ prepared by respected independent analysts Robert W. Baird & Co (5th Feb 2014) and by Stifel, Nicolaus & Co (23rd Jan 2014). These completely refute Prescience’s spurious points and give ‘target prices’ for LKQ shares of $38 and $39 respectively, over 35% above their closing price on 7th February. Neither Baird nor Stifel hold shares in LKQ and therefore do not profit from movements in the LKQ share price … unlike Prescience.
All this is a world away from my passion for building businesses by delivering great customers service. It is a shame that a small company like Prescience can besmirch the efforts of the 25,000 men and women around the world who work for LKQ, including 7,000 in ECP; but sadly, this is the age in which we live. LKQ Corporation stands behind our accounts and performance, Deloitte stands behind their audits.