Group 1 Automotive Inc. (GPI, Financial) filed Quarterly Report for the period ended 2012-03-31.
Group 1 Auto has a market cap of $1.31 billion; its shares were traded at around $58.65 with a P/E ratio of 15.5 and P/S ratio of 0.2. The dividend yield of Group 1 Auto stocks is 1%. Group 1 Auto had an annual average earning growth of 4.8% over the past 5 years.
Our used vehicle results are directly affected by economic conditions, the level of manufacturer incentives on new vehicles and new vehicle financing, the number and quality of trade-ins and lease turn-ins and the availability of consumer credit. The stabilizing economic environment that benefited new vehicle sales also supported improved used vehicle demand that positively impacted our used vehicle retail sales in comparison to our 2011 results. As a result, we experienced a 24.0% increase in retail used vehicle volumes through the first three months of 2012 as compared to the same period in 2011. In addition, our average used vehicle retail sales price increased $666, or 3.4%, in the first quarter of 2012 over the comparable 2011 period to $20,000. Compared to the same period in 2011, used vehicle retail gross profit per retail unit improved 1.6% for the three months ended March 31, 2012 to $1,754. Further, the wholesale side of the business experienced increases in unit sales and gross profit for the three months ended March 31, 2012 as compared to the same period in 2011.
Coupled with the increase in SAAR, the focus that we have placed on improving our dealership sales processes has led to increased Same Store new vehicle sales and profit. Our Same Store new vehicle retail revenues increased 7.3%, primarily on increased new vehicle unit sales of 4.6% for the three months ended March 31, 2012 as compared to the corresponding period in 2011. Our Same Store revenues per retail unit (PRU) increased 2.6% to $32,597 in the first quarter of 2012 as compared to the same period in 2011 due primarily to manufacturer price increases. From a mix standpoint, we generated the majority of this volume increase through our domestic brands, which sold 22.0% more units in 2012. Same Store revenues improved 23.2%, 6.8% and 1.0% in our domestic, import and luxury categories, respectively. The level of retail sales, as well as our own ability to retain or grow market share during the future periods, is difficult to predict.
Our Same Store new vehicle gross profits improved 14.3% for the three months ended March 31, 2012 and our Same Store gross profit PRU increased by 9.2% to $1,891. This gross profit PRU improvement was lead by a $463 increase in our luxury brands and a $122 increase in our import brands. As a result, our Same Store gross margin increased by 40 basis points from 5.4% in the first quarter of 2011 to 5.8% in the first quarter of 2012.
We have continued our focus on improving our finance and insurance business processes. As a result, Same Store finance and insurance revenues increased by 20.4% during the three months ended March 31, 2012 to $53.2 million. This improvement was primarily driven by a 9.0% increase in new and used vehicle unit sales, along with an increase in penetration rates for finance and vehicle service contracts of 120 basis points and 360 basis points, respectively. In addition, finance income per contract increased by 10.3% as compared to the same period in 2011, driven by an increase in amounts financed, which correspond with higher average selling prices, and stabilizing economic and customer lending conditions that have allowed for lower customer down-payments and higher amounts financed. In addition, we experienced a 22.5% increase in insurance and other product revenue as a result of increases in both income per contract and penetration rates relating to these product offerings. These increases more than offset an increase in our chargeback expense. As a result, our Same Store revenues PRU for the three months ended March 31, 2012 improved 10.6%, or $113, to $1,181 per retail unit sold.
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Group 1 Auto has a market cap of $1.31 billion; its shares were traded at around $58.65 with a P/E ratio of 15.5 and P/S ratio of 0.2. The dividend yield of Group 1 Auto stocks is 1%. Group 1 Auto had an annual average earning growth of 4.8% over the past 5 years.
Highlight of Business Operations:
For the three months ended March 31, 2012, total revenues increased 18.1% from 2011 levels to $1.7 billion and gross profit improved 17.4% to $260.4 million. Operating income rose for the three months ended March 31, 2012 by 37.6% from 2011 to $54.0 million. Income before income taxes improved to $37.3 million for the first quarter of 2012, which was a 52.2% improvement over the same period from the prior year. For the three months ended March 31, 2012 and 2011, we realized net income of $23.1 million and $15.4 million, respectively, and diluted income per share of $0.97 and $0.64, respectively. We generated cash flow of $6.4 million and $25.0 million for the three months ended March 31, 2012 and 2011, respectively.Our used vehicle results are directly affected by economic conditions, the level of manufacturer incentives on new vehicles and new vehicle financing, the number and quality of trade-ins and lease turn-ins and the availability of consumer credit. The stabilizing economic environment that benefited new vehicle sales also supported improved used vehicle demand that positively impacted our used vehicle retail sales in comparison to our 2011 results. As a result, we experienced a 24.0% increase in retail used vehicle volumes through the first three months of 2012 as compared to the same period in 2011. In addition, our average used vehicle retail sales price increased $666, or 3.4%, in the first quarter of 2012 over the comparable 2011 period to $20,000. Compared to the same period in 2011, used vehicle retail gross profit per retail unit improved 1.6% for the three months ended March 31, 2012 to $1,754. Further, the wholesale side of the business experienced increases in unit sales and gross profit for the three months ended March 31, 2012 as compared to the same period in 2011.
Coupled with the increase in SAAR, the focus that we have placed on improving our dealership sales processes has led to increased Same Store new vehicle sales and profit. Our Same Store new vehicle retail revenues increased 7.3%, primarily on increased new vehicle unit sales of 4.6% for the three months ended March 31, 2012 as compared to the corresponding period in 2011. Our Same Store revenues per retail unit (PRU) increased 2.6% to $32,597 in the first quarter of 2012 as compared to the same period in 2011 due primarily to manufacturer price increases. From a mix standpoint, we generated the majority of this volume increase through our domestic brands, which sold 22.0% more units in 2012. Same Store revenues improved 23.2%, 6.8% and 1.0% in our domestic, import and luxury categories, respectively. The level of retail sales, as well as our own ability to retain or grow market share during the future periods, is difficult to predict.
Our Same Store new vehicle gross profits improved 14.3% for the three months ended March 31, 2012 and our Same Store gross profit PRU increased by 9.2% to $1,891. This gross profit PRU improvement was lead by a $463 increase in our luxury brands and a $122 increase in our import brands. As a result, our Same Store gross margin increased by 40 basis points from 5.4% in the first quarter of 2011 to 5.8% in the first quarter of 2012.
We have continued our focus on improving our finance and insurance business processes. As a result, Same Store finance and insurance revenues increased by 20.4% during the three months ended March 31, 2012 to $53.2 million. This improvement was primarily driven by a 9.0% increase in new and used vehicle unit sales, along with an increase in penetration rates for finance and vehicle service contracts of 120 basis points and 360 basis points, respectively. In addition, finance income per contract increased by 10.3% as compared to the same period in 2011, driven by an increase in amounts financed, which correspond with higher average selling prices, and stabilizing economic and customer lending conditions that have allowed for lower customer down-payments and higher amounts financed. In addition, we experienced a 22.5% increase in insurance and other product revenue as a result of increases in both income per contract and penetration rates relating to these product offerings. These increases more than offset an increase in our chargeback expense. As a result, our Same Store revenues PRU for the three months ended March 31, 2012 improved 10.6%, or $113, to $1,181 per retail unit sold.
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