(Almost) four billion

 

Inter Cars is a brand that is well known among drivers, as the company (or more precisely a capital group) deals in distribution of a variety of spare parts for passenger cars, commercial vehicles and trucks. The company also sells Triumph and Ducati motorcycles.

 

The parent company of the Group has shares in 25 subsidiaries, two indirect subsidiaries and two associated companies.  The business activities are ran not only in Poland, but also in such countries as Czech, Slovakia, Romania, Italy, Hungary, Germany, Estonia or Croatia.  Inter Cars has numerous companies in those countries, which distribute automotive spare parts, offer logistics services and also repair services. 

 

The company also owns a subsidiary in Ukraine - and last year this was the only geographical market which generated loss of income in Inter Cars Group.  Naturally this was caused by the general political and economical crisis in Ukraine.  

 

Let's have a look at consolidated revenue and profit of the company for the years 2008-2014, i.e. for a long 7-year period:  

 

 

As we can see, in the consecutive years the revenues grew each time.  Finally we might say that in 2008 the company recorded PLN 1.74bn, whilst in 2014 it was (what we wrote about) almost PLN 4bn.  The annual average value of revenue is PLN 2.78 billion. The operating profit for previous year was PLN 227.06m., so it was better than a year ago. The company also managed to improve the EBIT profitability, which went up from 5.5 percent to 5.76 percent.  Also the net profitability went up, reaching the level of 4.50 percent.  It was the highest net margin in the whole period of seven years, whilst the highest operational profit was generated in 2011 (5.82 percent).  

 

Let's have a look at balance sheet data and basic information on cash flows:  

 

 

 

At the end of December 2014 the current assets amounted to PLN 1.53bn., i.e. 122.7 percent of the amount recorded a year ago. The assets were mostly composed of stock, which was lately valued at the level of over one billion zlotys.  Only receivables on deliveries and services, completed by cash assets covered 94 percent of the amount of current liabilities.  This is not a bad result, taking into account that we are discussing a company which sells popular products in large numbers, and having quite big possibilities of liquidating stock.  The current ratio, including all current assets, was really high (2.77 points).  A year ago it was less - 1.68 points. 

 

The capital Group obeys the golden rule of balance, i.e. the equity capital must be higher than non-current assets, at the same time it is higher than the general amount of liabilities, at least this situation was true in 2013 and 2014 (before that it was not so obvious). 

 

A bit worrying may be the fact that the most important cash flows, i.e. cash flow from operating activities, were in minus the last year(PLN -25m.). But a year ago they were far above zero level.  In total, all cash flows (together operating, investment and financial) turned out to be in plus in 2014, and reached PLN 16.85m.  

 

The company still realizes further expansion on such markets as Middle and Eastern Europe, where it reaches high sales increase.  It is enough to say that the growth in Latvia was at the level of 187 percent, in Bulgaria 93% and in Hungary 90 percent.  The group generates around 35% of total sales revenues outside Poland. 

 

The shareholder structure is currently as follows:  

 

 

The graph of share price is the following:  

 

 

At least since late spring 2013 we can see a clear growing trend.  The price went from around PLN 93 up to over PLN 220.  Currently we might consider resistance to be at PLN 225.  Support is PLN 211, or PLN 199.95 or lower at PLN 180.  The foundations of the company are still strong, so even a market correction, if it was to happen, would not have to cancel the general trend.  

 

Source: finweb.pl

2015-03-10