HOUSTON – Group 1 Automotive, Inc. (NYSE:NYSE:), a major player in the automotive retail sector, has faced a disruption to its U.S. operations due to a cybersecurity incident at CDK Global (NASDAQ 🙂 LLC, a third party. software provider. The incident, which affected CDK resellers’ systems, led the Fortune 300 company to implement its cyber incident response plan and isolate its systems from the CDK platform.
Despite the disruption, Group 1 US dealerships have continued to operate using alternative measures. The company’s UK operations are not affected as they do not use CDK’s distributor systems. CDK Global has indicated that recovery of the dealer management system is expected to take several days, while the timeline for restoring other affected applications is still uncertain.
Group 1’s ability to assess the material impact of the outage depends on the restoration schedule and the extent of regained access to CDK’s systems. The company is actively monitoring the situation and is prepared to take additional measures if necessary.
Daryl Kenningham, president and CEO of Group 1, praised his team for their dedication to maintaining customer service excellence during the disruption and expressed gratitude to employees, customers and partners for their patience.
Group 1 Automotive operates 202 dealerships, 264 franchises and 42 collision centers in the US and UK, and offers a wide range of automotive services, including vehicle sales, financing, maintenance and repair services.
The information presented in this article is based on a press release from Group 1 Automotive, Inc.
In other recent news, Group 1 Automotive has been actively working to improve its financial situation. The company reported strong results in the first quarter of 2024, with record revenue of $4.5 billion and adjusted net income of $130 million. A significant development was the acquisition of Inchcape (OTC:) Retail, which marked the company’s largest dealer transaction to date.
Group 1 Automotive also announced a substantial increase in its share buyback program, with the board of directors authorizing up to $250 million. This represents a significant boost over the previous authorization. Additionally, the company declared a quarterly dividend of $0.47 per share, in line with a 4% increase in its annualized dividend rate.
Another important development was the expansion of the company’s revolving syndicated credit facility by $500 million, bringing the total to $2.5 billion. This strategic move, involving a consortium of 20 financial institutions, aims to strengthen the company’s balance sheet and support growth through acquisitions.
These are recent developments at Group 1 Automotive.
InvestingPro Insights
As Group 1 Automotive, Inc. (NYSE: GPI) overcomes the challenges posed by the cybersecurity incident, it is worth noting the company’s financial strength and market performance. With a market capitalization of $3.94 billion, Group 1 Automotive trades with a compelling price-to-earnings (P/E) ratio of 6.53, trailing twelve months to Q1 2024, indicating potential undervaluation compared to its industry peers. This is further supported by the company’s revenue growth of 10.34% during the same period, indicating strong revenue performance.
A tip from InvestingPro highlights that analysts have revised upward their earnings expectations for the coming period, which could be indicative of a resilient business model capable of weathering operational shocks like the one it is currently facing. Additionally, Group 1 Automotive has demonstrated a commitment to shareholder returns, having increased its dividend for 3 consecutive years and maintaining dividend payments for 15 consecutive years.
For investors seeking long-term value, it is worth noting that Group 1 has generated high returns over the past decade and strong returns over the past five years, suggesting a track record of strong financial management and strategic growth initiatives. Given that the company is expected to be profitable this year and has been profitable for the past twelve months, the outlook remains optimistic despite near-term challenges.
InvestingPro offers additional information and metrics for Group 1 Automotive, which can be accessed at https://www.investing.com/pro/GPI. For those interested in digging deeper, use the coupon code FORECASTS24 to get an additional 10% discount on an annual or bi-annual Pro and Pro+ subscription. With 9 additional InvestingPro Tips available, investors can gain a comprehensive understanding of the company’s financial health and future prospects.
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