Blue-sky multiples for Jaguar, Land Rover and Ford soar in H2 2013

Article by Christian Andrei, on April 25, 2014

Blue-sky store values for Jaguar, Land Rover and Ford brands surged in the in the second half of 2013 from first-half figures for their dealerships, according to the Blue Sky Report for year-end 2013 as published by dealership buy/sell advisory firm Haig Partners. Blue sky is the intangible value of a dealership expressed as a multiple of adjusted pretax income.

Multiple for Jaguar Land Rover rose from 4.0 to 5.0 in the first half of 2013 to 4.5 to 5.5 in the second half, boosted by surging Land Rover sales and profits as well as new products. Ford’s multiple rose from 3.5 to 4.5 in the first half of 2013 to 4.0 to 5.0 in the second half of the year.

Ford gained the most market share among local brands in 2013 and was the most desirable brand, as measured by blue sky. Blue-sky multiples for BMW, Mini, Hyundai, VW and Mazda brands dipped. Haig Partners pegs the average industry multiple in 2013 at 4.3.

Alan Haig, president of Haig Partners, remarked that overall, multiples may stable throughout 2014, with the average multiple playing at around 4.5. He expects the figure not to surge a lot, and even said the number many drop sharply when people get concerned about the next recession.

“But that’s still probably years away,” Haig said. In evaluating blue-sky values, Haig’s report tracks Jaguar and Land Rover, and BMW and Mini, as if they were a single entity.

According to the report, luxury brands topped the ranking multiples with Mercedes-Benz, BMW/Mini, Lexus, Audi and Porsche getting the highest range of multiples. Mercedes-Benz’s multiples were 5.5 to 7.5, while the others have multiples reaching 7.0.

The company said BMW’s multiples dropped as it is limited by its disclosure of facility renovation requirements that exceeds $8 million per store on average. [source: automotive news - sub. required]

Topics: jaguar, land rover, ford

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