Rick Armstrong started his working life as an upholsterer.
When he decided that that line of work wasn’t for him, his father told him to secure another job before he threw in the towel.
So at the age of 19, he became a car salesman.
Today he owns one of New Zealand’s biggest car dealerships, with annual turnover approaching half a billion dollars.
Armstrong’s has now grown to a point where it needs more capital, which may mean a listing on the NZX and the ASX.
The exercise would involve Armstrong selling down his 100 per cent stake by up to 40 per cent and the company buying property associated with him.
Armstrong’s has embarked on a “non-deal” roadshow to test the water in the investment community for a possible share offer and has engaged Jarden and UBS
“I always had an ambition to be in business for myself,” Armstrong told the Herald.
Armstrong’s was formed in 1993 when the Japanese used car import trade was “a bit or a gold rush”.
“It gave me the opportunity to establish the business and get a bit of wind in my sails.
“I always had an ambition to be in the new car game because I saw that as being more of a long-term play.”
Early in the piece, Armstrong’s won the right to sell Peugeot, Mercedes and Jaguar.
The business started in Christchurch with purpose-built facilities – a theme that was replicated throughout the country as the company expanded first to Dunedin and then to Wellington.
In 2014 the company gained a presence in Auckland with the purchase of Giltrap City Toyota – which was re-branded as Auckland City Toyota.
“It was not obvious to me at the time, but Auckland was to become the main play for us.”
Armstrong saw an opportunity in East Auckland and established a precinct there, which he said is proving to be a successful strategic move.
While Armstrong is looking to sell down his stake, he says his life-long love affair with cars, or the business, is not about to end any time soon.
He said the capital raise will leave the company in a position to consider mergers and acquisitions.
As Armstrong sees it, the New Zealand market – with its 400 franchises and dealerships – is in need of consolidation.
There six or seven key players in New Zealand that are arguably getting bigger and stronger, he says.
Troy Kennedy has this year taken over as the group chief executive following a number of years as chief financial officer.
The CFO role has now been filled by former CFO of Abano Healthcare and Airwork Holdings, Brian Fouhy.
Since 2019 the Group’s revenues have grown steadily from $448 million and are currently on course to surpass half a billion dollars in 2022.
The group has also recorded strong Ebitda growth over that time.
Armstrong’s group revenues are diversified across new and used vehicle sales, parts, servicing, finance and insurance and distribution.
The company sold about 12,000 vehicles in its last financial year, spanning 16 global automotive brands across its retail network, including the distribution in New Zealand for two global brands.
Armstrong’s, which employs 500 people, said there had been sustained expansion and diversification of its brand portfolio of Alfa Romeo, Audi, Citroën, Fiat, Hyundai, Jaguar, Jeep, Land Rover, Mercedes-Benz, Nissan, Peugeot, Porsche, RAM, Subaru, Toyota and Volvo.
The company has an investment pipeline underway to expand its operational footprint by around 2025, including a new franchise dealership in Christchurch, a new parts and servicing centre in Wellington and up to three new showrooms in Botany.
Twenty-eight years after its inception, the company is now of sufficient size and scale that it warrants a new phase or growth, Armstrong said.
“I feel like I have taken it to the point where it is now,” he said.
“I really love it and I’m not going anywhere – I want to stay on for the long term- but it is at point where it needs to be managed strategically and professionally through to the next phase of growth.”
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