It’s been a good day to be a shareholder of AP Eagers Ltd (ASX: APE). At lunch its shares have surged higher by over 4% to $9.44 after the company provided the market with full year earnings guidance.

For the year ended December 31 2016 the automotive retail group expects statutory net profit before tax to be between $135 million and $140 million.

This will be the sixth consecutive year of record profits and equates to an increase of between 11.5% and 15.7% year on year.

Pleasingly a key driver in the strong result has been the growth of its retail operations on a like-for-like basis and not just acquisitions. For FY 2016 management expects like-for-like sales growth to finish at the same record levels it achieved in 2015.

A particular highlight has been record trading levels in South Australia and the Hunter Region, together with a big improvement in its Truck division.

The company has been busy with acquisitions again this year. These have not only expanded the company’s geographical footprint, but following a successful integration look set to be accretive to earnings this year.

Management also took this opportunity to announce the opening of its second Carzoos store. The Carzoos brand is a new way to buy and sell used cars. Instead of being on a forecourt on the outskirts of a city, Carzoos are based inside shopping centres.

The latest opening will be the company’s flagship store and is based in Westfield’s North Lakes shopping centre. I really like the concept and I’m pleased to see another new store opening.

Overall I’ve been impressed with the company’s performance and believe it has positioned itself for more of the same next year.

This should allow it to grow its generous dividend further, which is expected to provide shareholders with a fully franked 3.7% yield this year according to CommSec.

Although at 17x earnings AP Eagers comes at a premium to the struggling Automotive Holdings Group Ltd (ASX: AHG), it is in line with newly-listed Autosports Group Ltd (ASX: ASG). As a result I would class it as a buy.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.