october/november 2001 - Australian Automotive Aftermarket Magazine

EXCLUSIVE
From Repco
to PacAuto
and now APG
New
Top
Player
After months of speculation, the newly
formed Automotive Parts Group has
become the owner of the previous Pacific
Automotive business which was sold by Pacific
Dunlop for $251m.
The new company is now the owner of
Repco Australia and New Zealand,
Motospecs, Appco, Ashdown, Carparts and
the Distribution Centres.
The Automotive Parts Group (APG) is
owned by a consortium which includes
Gresham Private Equity, GS Private Equity
and Macquarie Direct Investment. The majority
of the equity is split between those
investors with an additional equity being held
by the existing management team. The directors
are: Peter Mummery (Managing
Director), Michael Brown (Non-Executive
Chairman), Paul Evans (Gresham), Greg
Minton (GS), Robert Backwell (Macquarie)
and another from the current APG management
team (t.b.a.).
The APG management team is Peter
Mummery (MD), Peter Cooper (Chief
Financial Officer), Gary West (GM, Strategy &
Business Development), Catherine Saunders
(GM Human Resources), Bob Wyeth (GM
Merchandise & Marketing), Jeff Taylor (GM,
Repco NZ), Brendan Redmond (GM, Repco
Australia), Les Healey (GM, Ashdown),
Trevor Garrard (GM, Motospecs), Neil
McBain (GM, Carparts), Mike Bergin (GM,
Distribution & Logistics) and Rod McKenzie
(GM, Property).
Managing Director, Peter Mummery told
Automotive Aftermarket magazine: “This is a
new era for the business. We’ve got a good
buy at a price that enables significant reinvestment
by both acquisition and development.
The working capital of $68.5 million
that’s been put in is more than adequate to
Peter Mummery:
“We’ve got a good
buy.”
improve operational
efficiency
and fund future
expansion.
“The new
stand-alone status
allows a more
determined focus
on core business
principles. There
was much speculation
on the future
of the individual
business units, but
in reality, the strength of the combined businesses
makes the group so attractive.
“This more integrated focus for the core
operating divisions will deliver greater efficiencies
and cost savings that will ultimately
benefit trade and retail customers. Already
the return of our Distribution Centres has
resulted in significant improvements in our
fill rate to the stores and we expect similar
improvements to be realised across the business.
“The on-going commitment of our executive
management team as shareholders
reflects the positive working relationships we
developed with the consortium. And that consortium
is fully supportive of our on-going
commitment to our trade customers and our
aggressive retail strategies from which we
expect significant growth.”
Mummery says the problems of the past
are behind the business and insists the flat
profits of recent years were the result of management’s
growth plans taking longer than
initially planned. He cites the difficulties of
closing of 13 Distribution Centres in the last
18 months as an example of the right moves
being made but the timing being drawn out.
As regards market share, APG now has 7%
of retail and 18% of trade in Australia. This,
Mummery says, will improve on both fronts.
He insists the retail market has the room for
the new major players now operating and his
company’s range of sites and new retail plans
will make Repco competitive. There is no
intention of major cuts in the number of
News
First Repco, then
Pacific Automotive
and now Automotive
Parts Group.
Derek Pickard has
the story on the
management buy-out.
Repco outlets and the present level of just
over 300 will remain for the next two years.
There will be, however, a greater concentration
on many of those sites being involved in
a cultural change to ensure they fully address
the needs of both trade and retail customers.
Also, as more new format retail stores come
on line, the number of traditional Repco outlets
will reduce.
“Our 18% share in trade can be improved
even though it’s a flat market. The improvement
is because over 40% is still in the hands
of those outside the organised trade suppliers.
We’re better able to meet the needs of
customers in the business to business area
and become the preferred supplier.
“Our cost position is still to high and
mainly in two sectors of operations: distribution
and I.T.” Mummery believes greater efficiency
in both must be achieved while still
looking after customers: “These efficiencies
don’t relate to a reduction in head count. In
fact, our employee numbers are planned to
grow.”
Additionally, there are no plans to pull out
of any areas where the company operate with
two channels that may appear to be in conflict:
“We are a leading player in all channels
to market and will develop on that with our
customers as the prime focus. Our strategy
includes our scale advantages in procurement,
I.T., finance and distribution.
“The future for us also includes all business
units being restructured to suit the cultural
diversification of each business while
taking advantage of the scale of the total
group.”
On overall staff numbers, Mummery
expects a gradual growth due to the plans to
expand the number of larger retail stores.
“Our Repco brand is among our top
strengths. It’s been allowed to go to sleep but
will and is being awakened. I’ve every confidence
in this being achieved and the expansion
in our marketing spend is part of that
growth.”
AUTOMOTIVE AFTERMARKET OCTOBER/NOVEMBER 2001 3