By CRM staff
Toronto, Ontario — May 21, 2019 —
Light on labour
Brock Bulbuck, the Boyd Group’s CEO, is concerned about the shortage of technicians in the auto repair industry, according to statements made in the fund’s otherwise sunny first quarter financial statements.
“While the industry-wide technician shortage continues to be a challenge, we delivered above-average same-store sales growth in Q1,” Bulbruck is quoted as saying.
The sombre tenor of the quotes is somewhat surprising, given the overall positive numbers reported in the statement. Compared to Q1 of 2018, sales were up by close to a quarter, from about $453 million to just under $558 million. On a per-store basis, growth rates ticked beyond the five percent mark too.
The company was also able to boast numerous acquisitions, with 42 new locations being absorbed into Boyd over the quarter, including ones in new state markets—New York and North America.
While the firm cited labour supply issues as concerns, Bulbuck also wrote that Boyd may have a comparative advantage, suggesting the company believes that it will be better off than most competitors.
“We attribute this to continued strong demand, an increased component of parts sales in our sales mix along with modest growth in our technician capacity.”
Labour concerns aside, Boyd’s investment potential has been touted in numerous Canadian publications. The Winnipeg firm’s investments in the U.S. has been highlighted as one of its stocks strengths. After tumbling in value, the Canadian dollar’s value has somewhat stabilized at 74 cents U.S.
Sealing the steel deal
On Friday, the Washington Post reported that a deal had been reached between U.S. and trading partners Canada and Mexico which would lift the President’s tariffs on steel and aluminum. According to the report, the tariffs—which had been unilaterally imposed by President Trump last year—will be waived exchange for Canada and Mexico imposing new restrictions on Chinese steels.
Justin Trudeau reportedly gave his assent to the new arrangement during a phone meeting with the president.
While the details of the new restrictions on Chinese steel are unclear, Canada, as a net exporter of steel, does not receive significant quantities of Chinese metals.
Magna Cum Laude
It has been a tougher-than-expected quarter for Canadian auto parts giant Magna International, which fell 10 cents short of reaching external stock-to-performance estimates. According to the company’s Q1 report, per-share profits reached $1.63, down from $1.84 in Q4 2018.
Overall, this slack performance translated into a two percent drop in revenue, from $10.8 billion in Q1 2018, to 10.6 billion this year.
While investors may be disappointed in the parts giants’ soft performance, the company did achieve a perfect C-score of 0.00000—a metric which seeks to determine the likelihood of company books being cooked. The enviable score suggests there is absolutely no evidence to suggest any sort of malfeasance.
