Australia

RPM Automotive Group acquires two tyre sales businesses and provides trading update

RPM Automotive Group Ltd (ASX:RPM) will acquire Elite Tyre Group as well as Super Tyre Mart for $1.4 million comprising 30% cash and 70% shares.

The two businesses are expected to produce a combined revenue of $5.5 million with an EBITDA margin in the range of 8-10%.

Positively, this represents a purchase price of around 3x EBITDA.

The acquisitions were revealed today at the companys first AGM as a listed company along with a trading update for the September quarter.

September quarter trading update shows profit

The company generated revenues of $7.75 million and EBITDA of $778,000 representing an EBITDA margin of 10%.

RPMs CFO Dale Sinnott commented: “Our current results, achieved in soft trading conditions, in the aftermath of the RTO, have laid the foundations for the Group to achieve its forecast returns.

“We also find ourselves in a strong position to integrate these new businesses into our infrastructure, creating opportunities and economies of scale across the RPM.”

Notably, the September quarter, is historically the weakest period across the entire automotive industry but the company said it has seen a strong recovery in October and November.

Co-founder has been buying stock

Managing director Clive Finkelstein recently purchased 24,700 company shares through on-market trades.

The $3,851 purchase increased Finkelsteins overall hRead More – Source

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