Despite substantial bids for shares in luxury car and boat retail group Forza in the last month, chief executive David McAlpin has denied rumours that a takeover bid could be imminent.
Despite substantial bids for shares in luxury car and boat retail group Forza, the company has denied rumours that a takeover bid could be imminent. In addition, the company is not planning a share buyback, Forza chief executive David McAlpin said.
Although Forza has 552 million shares in issue, its average trading daily volume is reportedly only about 45 000 shares. However, in the last few weeks some strong bids have emerged, Business Day reported on Thursday. Last month, Forza shares notched up volumes of 250 000 and 200 000 on separate days and again close to 190 000 on Tuesday and 156 000 on Wednesday.
The share price has not lifted significantly on these volumes, though. A year ago Forza shares were at 23c, but they have fallen as low as 8c this year, and over the last few weeks they have held at between 8c and 9c.
The group recently released year-end results to August, showing a 24 per cent increase in operating profit and a 16 per cent increase in cash flow from operations. At the time, Forza said it expected to deliver positive earnings growth next year. Its customer base, which is the upper end of the market, is more insulated than the mass market even though the effect of global events on consumer spending was difficult to quantify, Business Day reported.
McAlpin reiterated on Wednesday that the group was bullish about its prospects. The only reason he could suggest for the recent unusual interest in shares was that some investors believed there was potential in them.
Forza’s management owns 44 per cent of the shares and Corpcapital owns 24 per cent. “There are not a lot of shares out there, and not a lot of sellers at 10c,” McAlpin said.
The group’s best-known brand, Investment Cars, recently bought 51 per cent of Cape luxury car dealers Bloomsbury/Ashley’s. It has the sole Lamborghini franchise in South Africa and also has BMW dealerships.