HOUSTON – Group 1 Automotive, Inc. (NYSE: NYSE:), a major player in the automotive retail sector, has faced a disruption in its U.S. operations due to a cybersecurity incident at CDK Global (NASDAQ:) LLC, a third-party software provider. The incident, which affected CDK’s dealer systems, prompted the Fortune 300 company to implement its cyber incident response plan and isolate its systems from CDK’s platform.
Despite the interruption, Group 1’s U.S. dealerships have continued to operate using alternative measures. The company’s U.K. operations remain unaffected as they do not utilize CDK’s dealer 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 is contingent on the restoration timeline and extent of regained access to CDK’s systems. The company is actively monitoring the situation and is prepared to take further action if necessary.
Daryl Kenningham, President and CEO of Group 1, commended his team for their dedication to maintaining customer service excellence during the outage, expressing gratitude to employees, customers, and partners for their patience.
Group 1 Automotive operates 202 dealerships, 264 franchises, and 42 collision centers across the U.S. and U.K., offering a comprehensive range of automotive services, including vehicle sales, financing, maintenance, and repair services.
The information presented in this article is based on a press release statement from Group 1 Automotive, Inc.
In other recent news, Group 1 Automotive has been active in enhancing its financial standing. The company reported strong Q1 2024 results, with record revenues of $4.5 billion and an adjusted net income of $130 million. A significant development was the acquisition of Inchcape (OTC:) Retail, marking the company’s largest dealership transaction to date.
Group 1 Automotive also announced a substantial increase in its share repurchase program, with the board of directors authorizing up to $250 million. This represents a significant boost from the previous authorization. Additionally, the company declared a quarterly dividend of $0.47 per share, aligning with a 4% increase in its annualized dividend rate.
Another major development was the expansion of the company’s revolving syndicated credit facility by $500 million, raising the total to $2.5 billion. This strategic move, involving a consortium of 20 financial institutions, is aimed at bolstering the company’s balance sheet and supporting growth through acquisitions.
These are recent developments at Group 1 Automotive.
InvestingPro Insights
As Group 1 Automotive, Inc. (NYSE: GPI) navigates through the challenges posed by the cybersecurity incident, it’s worth noting the company’s financial robustness and market performance. With a market capitalization of $3.94 billion, Group 1 Automotive trades at a compelling price-to-earnings (P/E) ratio of 6.53, as per the last twelve months as of Q1 2024, signaling a potential undervaluation compared to industry peers. This is further supported by the company’s revenue growth of 10.34% during the same period, indicating a strong top-line performance.
An InvestingPro Tip highlights that analysts have revised their earnings expectations upwards for the upcoming period, which could be indicative of a resilient business model capable of weathering operational disruptions like the one currently faced. Additionally, Group 1 Automotive has demonstrated a commitment to shareholder returns, having raised its dividend for 3 consecutive years and maintaining dividend payments for 15 consecutive years.
For investors looking for long-term value, it’s noteworthy that Group 1 has delivered a high return over the last decade and a strong return over the last five years, suggesting a track record of robust financial management and strategic growth initiatives. With the company predicted to be profitable this year and having been profitable over the last twelve months, the outlook remains optimistic despite near-term challenges.
InvestingPro offers additional insights and metrics for Group 1 Automotive, which can be accessed at https://www.investing.com/pro/GPI. For those interested in a deeper dive, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly 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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