Largely due to U.S. operations posting strong results, Boucherville, Quebec-based auto parts distributor Uni-Select Inc. has reported a 14% rise in fourth-quarter profit on the eve of its takeover of the USI-AGI Prairies Inc. joint-venture.
The company said it earned a net profit of C$14.2 million ($12 million), or 72 Canadian cents a share, for the three months ended Decemeber 31, up from a profit of C$12.4 million, or 64 Canadian cents a shares in the year-before period.
Uni-Select said sales at its Automotive Group USA jumped 45.5% to C$134 million, due to an extra month of sales from Middle Atlantic Warehouse Distributor, which it acquired during the fourth quarter of 2004.The company also said sales at its Automotive Group Canada rose 3.6% to C$120 million, while revenue at its Heavy Duty Group increased 11.3% to C$23 million.Total fourth-quarter revenue at Uni-Select rose 21% to C$278.3 million from C$229.7 million.
The results were posted as Uni-Select announced its intention to take full ownership of the USI-AGI Prairies Inc. joint venure with Acklands-Grainnger, which was formed in February 2002.
The purchase terms and conditions are set out in the shareholders agreement. Uni-Select intends to close this transaction and become sole shareholder of USI-AGI Prairies on May 31 2006.
“This joint venture has been successful and beneficial to both Acklands-Grainger and Uni-Select,” offered Jacques Landreville, president and chief executive officer of Uni-Select. “However, as time passed, it became obvious that each partner is intent on focusing its resources on its core operations. As the operations of USI-AGI Prairies are clearly the market segment of Uni-Select, it was natural for Uni-Select to want to purchase those assets.”
“Uni-Select and Acklands-Grainger have built a solid business relationship as joint venture partners, and plan to continue that relationship through a long-term supply agreement,” said Douglas Harrison, president of Acklands-Grainger.
Uni-Select estimates that this business development will add $3,800,000 to its pre tax profit on an annualized basis. Uni-Select is Canada’s second largest distributor of automotive replacement parts, equipment, tools and accessories and through Uni-Select USA, Inc., the company also provides service to customers in the United States where it is the 8th largest distributor.
Its subsidiary, Palmar Inc., sells replacement parts, tools and accessories for heavy-duty vehicles and wheels in Canada. The Uni-Select Network includes over 2,000 independent jobbers and services over 3,100 points of sale in Canada and the United States.