| Brisbane-based
components manufacturer CMI Limited today unveiled plans to diversify
and accelerate growth outside the automotive sector, with the formation
of a new services division through the acquisition of 100% of the shares
in a leading national chattel finance broking network, Capitalcorp Finance
and Leasing Pty Ltd.
CMI announced it had appointed ex-Bank of Queensland General Manager
Ian Whittle to head the expansion of its new national services division
which will be based in Brisbane.
Founded in 1990, Capitalcorp has grown rapidly to become one of Australia’s
largest independent chattel finance brokers with a turnover of approximately
$23 million in the 2003 fiscal year. The company, which maintains a
customer base in excess of 65,000, has 31 offices throughout Australia
and staff of over 160.
The acquisition, which is effective from the 1st July 2003, will be
earnings per share positive in the current financial year and will be
fully debt funded through CMI’s existing bank facility.
Capitalcorp’s founder and Executive Chairman, Geoffrey Thomas,
will continue with the group as part of an earn-out structured settlement,
the price of which is to be determined with reference to future performance,
and as such, cannot be quantified and disclosed.
Mr Hofmeister stressed that CMI was unequivocally committed to its traditional
manufacturing base. “While we are currently enjoying record volume
levels from our eleven manufacturing plants around Australia and New
Zealand, our investment in establishing a services division opens us
to the prospects of a business which can be expanded on a low-risk basis
and without the need for an intensive capital commitment.
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“We
see excellent growth potential ahead for Capitalcorp, with a major priority
being to utilise the business’ extensive national distribution
network to grow its lending operation”.
“After deciding to expand into the financial services business
we conducted extensive due diligence on the industry and are pleased
to say that Capitalcorp is not only a highly successful company, but
is also unique in its structure and practices and hence has great appeal.
Capitalcorp has a decentralized branch structure which has proven highly
effective and which we will maintain and expand going forward”.
“We’re extremely fortunate to have secured Ian Whittle to
lead our new division and his leadership, vision and experience will
play a pivotal part in the future growth of the business,” he
said.
“We expect a window of opportunity in the market over the next
18 months in which there’ll be a surge of aggregation of smaller,
independent chattel brokers as a result of continuing industry and lender
rationalization,” Mr Hofmeister said.
After posting a record after-tax profit of $7.22 million for 2003, CMI
recently forecast further earnings growth in the current fiscal year
on the back of continued strong demand from Australia’s automotive
sector.
Further Information
Please Contact:
Max Hofmeister
Chairman
CMI Limited
(07) 3004 8188
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