The collision repair business is booming again, with Boyd Group Services Inc. producing double digit growth in virtually all metrics for the second quarter of the year.
The Winnipeg-based company that has operations throughout Canada and the U.S. — it operates as Gerber Collision & Glass in the U.S. — generated sales increases of $753.2 million, up 22.9 per cent including same-store sales growth of 18.9 per cent.
Net profit for the quarter doubled compared to the same period last year to $26.3 million.
During the quarter the company added 25 locations to its network including 19 acquisitions and six new start-up locations and has added nine more subsequent to the end of the quarter which included six by acquisition and three start-up locations.
Boyd shares were up more than $10.00 in trading on the TSX Thursday, to close at $249.14, about $5.00 shy of its 52-week high.
Company CEO, Tim O’Day said the quarter produced record sales and adjusted EBITDA results but warned that during the current third quarter same store sales growth is already tracking at about half the second quarter rate.
Since the pandemic the company has focused intently on labour retention and attraction as, like most other sectors, auto repair technicians are in short supply.
“As labour capacity constraints continue to impact our business, workforce initiatives continue to have a positive impact and ongoing investments in technology, equipment and training position us well for continued operational execution,” O’Day said. “We remain committed to addressing the labour market challenges so that we can service additional demand.”
The company has opened or acquired 57 collision repair locations so far in 2023 and O’Day said the pipeline to add new locations and to expand into new markets is “robust.”
In a note to his clients, Zachary Evershed, an analyst with National Bank of Canada Financial Markets, said that the company is confident it will achieve its goal of doubling revenue by 2025 compared to 2019 results.
Evershed has a target price of $270.00 on Boyd shares over the next 12 months.
Chris Murray of ATB Capital Markets has a 12-month target of $285.00
Murray wrote in note on Thursday that management’s outlook was bullish as demand trends continue to exceed capacity.
He wrote, “Supply-side pressures are expected to continue to ease with increasing labour capacity from its technician development program, which should support a more favourable mix between parts and labour going forward.”
Martin Cash
Reporter
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
