The Autosports Group Ltd (ASX: ASG) share price is in the red today. This comes after the company released a business update to the market this afternoon.
At the time of writing, Autosports shares are trading around $3.88, down 0.51%. The S&P/ASX All Ords Index (ASX: XAO) is also drifting lower following a strong Christmas rally.
Here's what the company had to say.
Major Victorian expansion now complete
According to the release, Autosports has completed the acquisition of 10 Barry Bourke Motors dealerships in Victoria through its wholly owned subsidiary, Autosports Castle Hill.
The dealerships sell a mix of well-known car brands, including Audi, Volvo, Jaguar Land Rover, Geely, GMSV, LDV, Peugeot, Renault, and Suzuki. They are located in Berwick and Doncaster, which are two key car retail hubs in Melbourne.
The total cost of the deal was about $32.8 million. This includes around $29 million in goodwill and about $3.8 million for net tangible assets, plant, and equipment.
Autosports paid $14 million of the purchase price by issuing new shares at $4.50 per share. The rest was paid in cash using the company's existing debt facilities.
Why Autosports wanted these dealerships
This deal supports Autosports' long-term plan to grow its network of prestige and luxury car dealerships in major Australian cities.
The company has previously said it wants to build stronger relationships with large global car brands such as Audi, Jaguar Land Rover, and Volvo. This deal supports that goal, while also increasing the company's exposure to newer brands such as Geely and LDV.
Autosports expects the acquisition to start adding to earnings straight away. Over time, the company believes profit margins at the new dealerships will improve and move closer to the group average within the first year.
A growing business with advantages
Autosports is Australia's only ASX-listed company focused on prestige car dealerships. It now operates more than 75 businesses across Sydney, Melbourne, Canberra, Brisbane, the Gold Coast, and Auckland.
Because of its size, Autosports has some advantages that smaller dealerships do not. It can negotiate better terms with car manufacturers, manage vehicle stock more efficiently, and offer a wider range of finance, insurance, and aftersales services.
The business also earns money from several areas, not just selling new cars. Used vehicles, servicing, parts, finance, and insurance all contribute to revenue.
In FY25, Autosports reported record revenue of $2.865 billion. That result shows demand for premium vehicles has held up reasonably well, even while broader consumer conditions remain uncertain.
What to watch from here
Now that the acquisition is complete, attention turns to how well Autosports runs the new dealerships.
Investors will be watching profit growth, cost control, and whether the company continues to expand through smaller deals.
For long-term investors wanting exposure to Australia's premium car market, Autosports remains a stock worth keeping on the watchlist.
