The Group 1 Automotive net worth is more than just a number; it represents the financial strength and growth of a leader in the automotive retail industry.
At Ando Money, we aim to provide an in-depth analysis of this company’s financial performance.
In this article, we’ll explore Group 1 Automotive’s revenue, acquisitions, and overall financial health in 2024.
Quick Facts
| Fact | Detail |
|---|---|
| Name | Group 1 Automotive |
| Full Name | Group 1 Automotive, Inc. |
| Website | group1auto.com |
| Industry | Automotive Retail |
| Traded As | NYSE: GPI |
| ISIN | N/A |
| Founded | 1997 |
| Founders | N/A |
| Country/Territory | United States |
| Headquarters | Houston, Texas |
| Chief Executive Officer | Daryl Kenningham |
| Number of Employees | 16,011 (as of 2023) |
| Market Cap | $4.80 Billion (October 2024) |
| Total Assets | $8.5 Billion |
| Total Equity | N/A |
| Revenue | $17.87 Billion (2023) |
| Net Income | N/A |
What is the Market Cap of Group 1 Automotive in 2024?
As of October 2024, Group 1 Automotive’s market cap stands at $4.80 Billion, making it one of the prominent players in the automotive retail sector.
This places the company as the world’s 2,831st most valuable by market cap. Its performance is comparable to other automotive brands, reflecting strong financial health and steady growth.
To give some perspective, here are some companies that operate within a similar space or have a comparable influence in the automotive industry:
- AutoNation
- Lithia Motors
- Sonic Automotive
- Penske Automotive Group
- Asbury Automotive Group
- CarMax
- Inchcape plc
- Hertz Global Holdings
- Avis Budget Group
- Vroom
You can explore more companies with similar financial profiles by checking our top wealthiest businesses.
Group 1 Automotive Financial Performance Overview
Revenue Overview and Key Drivers
The revenue of Group 1 Automotive reached $17.87 billion in 2023, growing at a CAGR of 10% from 2019-2023.
This growth was driven by multiple segments, with new vehicles, used vehicles, parts & services, and F&I (Finance & Insurance) all playing a significant role.
While new vehicle revenue hit a quarterly high of $2.4 billion in the second quarter of 2024, all other segments have also shown robust performance.
U.S. operations dominate the revenue share, while the U.K. contributes through recent acquisitions, reflecting diverse geographical reach.
Recent Acquisitions and Their Impact on Revenue
2024 was an active year for acquisitions. Group 1 acquired several high-profile U.S. dealerships in markets like Washington D.C., Southern California, and Hilton Head, focusing on brands such as Lexus, Mercedes-Benz, Toyota, and Honda.
These acquisitions aim to add approximately $1 billion in annual revenues.
In addition, the company’s agreement to acquire Inchcape dealerships in the U.K. is expected to close in the third quarter of 2024, bringing in estimated annual revenues of $2.7 billion.
These strategic acquisitions are expected to strengthen revenue streams and profitability.
Growth in Parts & Service Segment
Parts & Service continue to be the backbone of the company, contributing to more than 40% of gross profit.
Its stability provides a hedge against economic fluctuations, as evidenced by fixed absorption levels reaching around 110% in the second quarter of 2024.
By leveraging technology for service efficiency and enhancing customer experience, Group 1 maintains strong customer loyalty.
Innovations like online booking systems and automated processes help retain customers and drive the service segment’s revenue.
Finance & Insurance (F&I) Performance
The Finance & Insurance (F&I) division is another crucial revenue driver. In the second quarter of 2024, the gross profit per retail unit (PRU) remained high at $2,351, showcasing consistent growth.
The consolidation of lender bases, compliance integration, and a focus on transparency have been pivotal strategies in improving F&I profitability.
Geographic and Brand Diversification in Revenue Generation
Group 1’s revenue benefits from both geographic and brand diversification. With operations in 17 states in the U.S. and a growing presence in the U.K., the company’s market presence is substantial.
It represents 35 brands, with a balanced mix of import, luxury, and domestic vehicles. Such diversity reduces exposure to any single market or brand risk, stabilizing revenue streams.
Financial Health Through Cash Flow Management
The company demonstrated strong cash flow management in 2024. Operating cash flow was adjusted to $720 million, while free cash flow stood at $223 million year-to-date.
The company also executed share buybacks worth around $100 million, representing approximately 3% of its share count, contributing to increased shareholder value.
Impact of Debt and Leverage on Financial Strategy
Debt management remains a critical aspect of Group 1’s financial strategy.
As of June 2024, the company had a total debt of $4.6 billion, composed of various components, with floorplan debt being the largest.
About 55% of this debt is fixed-rate, which provides stability amidst fluctuating interest rates.
The company’s rent-adjusted leverage ratio is relatively low at 2.4x, offering flexibility for future mergers and acquisitions.
Operational Efficiencies and Cost Management
One of the main contributors to profitability has been effective cost management.
The company managed to reduce its Selling, General & Administrative (SG&A) expenses as a percentage of gross profit, improving from 73.3% (2Q19) to 66.3% (2Q24).
Digital tools and variable cost structures have helped to boost efficiency, allowing Group 1 to react quickly to changes in the market environment.
FAQs About Group 1 Automotive
What Are the Main Revenue Drivers for Group 1 Automotive?
The primary drivers of Group 1’s revenue are new vehicle sales, used vehicle sales, parts & service, and F&I.
How Does Group 1 Manage Its Debt?
As of June 2024, Group 1 manages a diverse debt structure with fixed and variable interest rates, with approximately 55% of its debt at fixed rates.
What Has Been the Financial Impact of Recent Acquisitions?
Recent acquisitions in both the U.S. and U.K. are expected to significantly contribute to revenue growth, particularly with the Inchcape acquisition expected to bring in $2.7 billion in annual revenue.
How Has Group 1 Improved Operational Efficiency?
By reducing SG&A expenses and implementing digital tools, Group 1 has enhanced efficiency, reflected in an improved ratio of SG&A expenses to gross profit.
Conclusion
Group 1 Automotive’s financial journey in 2024 showcases growth, strategy, and strong financial health.
I encourage readers to share their thoughts, leave a comment, or explore more about companies’ finances on Ando Money.
