While the kiwi auto sector may be new to Australian small-c – investors, they’ve heard the pitch before.
They believe Armstrongs looks similar to ASX-listed Peter Warren Automotive, which was listed earlier this year and whose shares are now trading at 8.2 times projected EBITDA.
Both companies have huge dealership footprints, their founders are still in business and would keep a significant stake after going public, they serve the same global automakers and want to benefit from the consolidation in the auto business.
Armstrong’s 34 dealer franchisees sell new and used vehicles, service, distribution, parts and accessories, and finance and insurance. They sell cars from 16 brands ranging from high quality Alfa Romeos and Jaguars to the more plebeian Hyundai and Subaru.
It has seven dealerships in Auckland, three each in Christchurch and Wellington and two in Dunedin. Together they sold around 12,000 cars in the 2021 financial year.