NZ's Armstrong's car dealership to decide on dual listing plans in Q1

Armstrong's owner Rick Armstrong. Photo / Supplied

Auckland-based car dealership company Armstrong's said it is trading strongly and that it expects to update the market on its dual sharemarket listing plans in the first quarter of this year.

"Subject to market conditions Armstrong's currently intends to pursue a potential dual listing on the main board of the New Zealand Stock Exchange and Australian Stock Exchange in 2022," the company said.

Armstrong's is one of New Zealand's biggest car dealerships, with annual turnover approaching half a billion dollars.

The initial public offer would involve owner Rick Armstrong selling down his 100 per cent stake by up to 40 per cent and the company buying property associated with him.

Armstrong's embarked on a "non-deal" roadshow late last year to test the water in the investment community for a possible share offer.

A statement out last week from NZX-listed NZ Automotive Investments - the company behind 2 Cheap Auto Cars - showed the sector is facing some headwinds.

Among other things, NZ Automotive said changes in the Credit Contract and Consumer Finance Act (CCCFA) lending standards had affected finance and insurance product sales.

Armstrong's dual listing aspirations may face competition for investors' dollars from expatriate New Zealander Neville Crichton's automotive business Ateco, which is also understood to be planning an IPO and ASX listing.

Troy Kennedy, Armstrong's chief executive, said there was healthy momentum in the company's long-term growth strategy.

In terms of the current weaker sharemarket climate, he said: "While capital market conditions are choppy this isn't something new, and we continue to see strong underlying trading conditions."

He said the company was working with brokers Jarden and UBS.

"And we look forward to being able to provide the investment community with a more definitive update on our thinking and possible timings around the end of Q1 this year," he said in a statement to the Herald.

Sharemarket conditions are soggy.

The S&P/NZX50 index fell into correction territory last week and is now 12.5 per cent down from its record high, set in January last year, of 13,643.

The company, one of the country's largest privately owned groups of automotive brands, has announced it will relocate its existing Toyota Mt Wellington operations to a newly leased 2ha site at 8 Forge Way in Mt Wellington this year, previously occupied by Fleet Partners.

The site will be used to house an expansive Toyota dealership for Auckland City Toyota, which is currently situated on a smaller neighbouring site.

The move increases the dealership size and capacity by over five times the current site and can accommodate more than 500 cars.

The 4,000sq m floor area will house a large showroom on the lower level, excellent customer facilities, a large parts area, 24 service bays, plus wash bays and ample customer parking.

The lease was part of Armstrong's long-term growth plan, Kennedy said.

"Toyota is a key brand for us in Auckland, with dealerships in Grey Lynn, Greenlane, and now a new super-site in Mt Wellington from early next year.

"This move will allow us to have significantly more sales and service capacity in a key Auckland location," he said.

The new dealership is expected to be operational in the second quarter of this year.

The change forms a core part of the group's ongoing expansion across the Auckland market - with new facilities now opened in Greenlane for Peugeot and Citroen, a new dealership in Botany covering Nissan, Peugeot and Citroen, and the expansion of the Auckland City Toyota dealership in Greenlane, Kennedy said.

Armstrong's has also secured additional land in Botany for three new dealerships, which are currently planned for 2023.