(Alliance News) - Inchcape PLC on Wednesday said it has agreed to sell three retail sites in Australia to Sime Darby Motors for GBP63 million.
The three sites that have been sold to Sime Darby represent a mix of brands, including Volkswagen, BMW, Mini Cooper, and Jaguar Land Rover. The transaction is expected to complete in the fourth quarter, Inchcape said.
The automotive distributor said this disposal follows the sale of three sites in May and July. The company realised cash proceeds of GBP13 million in total in Australia through disposing of the unprofitable sites.
The sale of sites in Australia is consistent with the FTSE 250-listed company's focus on core distribution capabilities, which is part of its "Ignite" strategy, it said. Under this plan, Inchcape intends to focus on distribution of Subaru and Peugeot Citroen in Australasia, and reduce its operations outside these two contracts.
Following the sale, Inchcape said it will embark on a reorganisation of the Australasian business, which it expects to incur exceptional costs of between GBP5 million and GBP8 million over the second half of 2019.
"This transaction is another demonstration of strategic progress under Ignite and the focus on our core distribution activities which generate 90% of our group trading profit," said Chief Executive Stefan Bomhard.
"Today's announcement demonstrates the disciplined utilisation of capital towards this high returning and capital light part of the market where I continue to see both organic and inorganic opportunities for Inchcape," added Bomhard.
Inchcape shares were trading 0.2% higher on Wednesday in London at 636.50 pence each.
Inchcape (INCH)