AUSTRALIA’S second-biggest listed automotive retailer, Autosports Group, has purchased the property that sites its third Mercedes dealership – Mercedes-Benz Hornsby in Waitara, New South Wales – for $12.5 million.

The business of the dealership was bought by Autosports in August for $3.5 million, excluding stock. It has a turnover of about $50 million a year and Autosports said it would contribute about $1 million to net profit before tax in the current financial year.

The acquisition sees Autosports become the first car group to own franchises in the three top-selling luxury car brands in Australia – Mercedes-Benz, BMW and Audi – in New South Wales.

In a statement to the Australian Securities Exchange, Autosports said the land purchase was debt funded and would increase the company’s property portfolio to about $31 million.

“Acquiring the property is expected to strengthen the group’s balance sheet and improve profitability over time,” the statement said.

The land covers 4149 square metres at 120-124 Pacific Highway in Waitara in Sydney’s north and is part of an established automotive retail strip. It gives the dealership a sales precinct in Waitara and into Hornsby.

Autosports said the dealership was purpose-built in 2010 and has a high-clearance showroom and covered external vehicle display area, with carwash and detailing facilities and customer parking at the rear.

The purchase of the Mercedes-Benz business and land follows Autosports buying luxury used-car trader Sydney City Prestige in August for about $900,000 excluding stock. This outlet has a turnover of about $65 million.

Autosports Group posted $1.748 billion in revenue for the 2019 financial year, up 0.2 per cent on the previous period, with gross profit up 3.6 per cent to $274.1 million.

But negatives crimped net profit after tax, down 32.9 per cent to $22 million.

In its statement to the ASX, the company said the bottom line was affected by acquisitions and investments during the 2019 financial year, including at Melbourne BMW, Canterbury BMW and Gold Coast. It also discontinued its Fiat Alfa Romeo franchise during that year.

Negatives that affected the company – and others – included the supply delays in vehicles from Europe caused by meeting new WLTP fuel economy rules, delays from the quarantines caused by the brown stink bug, the December 2018 Sydney hailstorm that damaged 220 Autosports vehicles and the fall in luxury car sales.

On the upside, Autosports said new-car revenue was growing and increased results were reported from its parts (up 25.5 per cent as a contributor to revenue) and service (up 15 per cent) divisions.

It said it had also recorded a 69 per cent growth in collision repair revenue in the period.

By Neil Dowling