ComfortDelgro – BT
Comfort DelGro unit to acquire Custom Coaches
Deal will give it 35 per cent share of the Australian bus building market
COMFORTDELGRO Corporation’s Australian subsidiary, ComfortDelGro Cabcharge (CDC), has entered into a memorandum of understanding for the acquisition of bus builder Custom Coaches, which will give CDC a 35 per cent share of the Australian bus building market.
CDC was set up in 2005 as a joint venture between ComfortDelGro and financial services provider Cabcharge Australia.
The proposed acquisition will act as a base for the group when it opens its new manufacturing plant at Rutherford, Hunter Valley in early 2009.
The acquisition is subject to due diligence, which is expected to wrap up in about a month’s time.
‘If this goes through, it will help us get a foothold until the building plant goes into operation,’ said ComfortDelGro spokesperson Tammy Tan.
Custom Coaches has bus building factories for fabricated stainless steel buses in Sydney, Adelaide and Gold Coast.
About 44 per cent of the group’s turnover currently stems from its overseas operations.
However, the group had stated earlier this year that is targeting 70 per cent of total turnover to stem from overseas operations within five to seven years.
Since its formation, ComfortDelGro, the world’s second largest land transport company, has adopted an aggressive overseas expansion strategy and currently has operations in seven countries – Singapore, China, the United Kingdom, Ireland, Australia, Vietnam and Malaysia.
Rising fuel costs caused the group’s net profit for the first quarter ended March 31 to drop 9.4 per cent to $50.2 million.
Revenue increased 5.8 per cent to $753.5 million, on the back of strong contributions from both its local and overseas operations.
ComfortDelGro’s Q1 earnings per share was 2.41 cents, down from 2.67 cents last year.
First-quarter turnover for the bus business rose 5.7 per cent to $378.6 million due to higher contributions from the group’s operations in Australia and China.
Overseas bus operations accounted for 59 per cent of total group bus turnover.
ComfortDelGro MD and group CEO Kua Hong Pak had said previously that the ‘various operations around the world remain sound, with most showing good growth at the top line’.
ComfortDelGro shares closed at $1.47 each yesterday, up by three cents.