A.P. Eagers is set to sell its three properties in Brisbane to Marquette Property Group (Marquette) for a combined price of $55.5 million.
In the announcement dated 26 April 2019, A.P. Eagers Limited (ASX: APE) announced that arrangements are in place which will see the sale of three properties at 11 Evelyn Street, 7 Creswell Street and 79 Breakfast Creek Road, in Newstead, Brisbane to Marquette for a total consideration of $55.5 million. The transaction is expected to be settled on 22 May 2019.
The sale of these properties will reportedly generate a profit before tax of $24.0 million which is stated to be recognised over the seven-year lease term with an annual profit contribution of $3.4 million.
CEO of AP Eagers, Martin Ward stated that “The sale of these properties is a key step in the execution of AP Eagers’ ‘Next100’ future growth strategy. A major component of this strategy involves the company’s move to the Brisbane Auto Mall.”
It has further been informed that the sale will be effected through a put and call option arrangement and all the preconditions to the options being exercised have been duly satisfied now. The company stated that If Marquette’s option to purchase the properties is not exercised by 8 May 2019, then it will exercise its option to sell the properties to Marquette by 10 May 2019.
Mr Ward added that “AP Eagers has secured 64,124 m2 within the state-of-the-art automotive retailing precinct, strategically located at the Brisbane Airport. The company intends to relocate a number of dealerships from Newstead to the Auto Mall to provide a truly unique and world-class customer experience.”
In a separate announcement to ASX, A.P. Eagers also released its forecast financial result for 2018 with statutory net profit after tax expected to be $101.2 million for the 2018 financial year, compared to $98.2 million for 2017, an increase of 3.0%.
The statutory net profit before tax is expected to be $133.7 million for the 2018 financial year, compared to $135.6 million for 2017, a decrease of 1.4%. This exceeds the profit guidance range given in November 2018 of between $126 to $130 million for 2018.
The growth underscores the encouraging performance of the company’s car and truck retailing businesses which have achieved record operating results for December 2018.
Following the completion of the sale of the above-mentioned properties, AP Eagers will continue to hold a substantial portfolio of owned property valued at $317.8 million at 24 April 2019.
In today’s trading session, APE stock price edged up by 1.501% to last trade at $8.790 on 26 April 2019. The stock last traded at a price to earnings multiple of 16.650x with a market capitalisation of $1.66 billion. Over the past 12 months, the stock has dipped by 0.46% despite a positive price change of attractive 31.21% in the past three months.
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