The changing of the guard at retail car giant Automotive Holdings Group has coincided with a restructuring of the business to separate the flagship motor vehicle business and a growing property empire.
The changing of the guard at retail car giant Automotive Holdings Group has coincided with a restructuring of the business to separate the flagship motor vehicle business and a growing property empire.
The property business, which has around $90 million in assets, is to come under the control of director Michelle Wheatley Harris, the daughter of founder Vern Wheatley who steps down as chairman of AHG at the end of the week.
Ms Wheatley Harris will take over responsibility from managing director Bob Branchi who will take over the non-executive chairmanship at the weekend, handing the steering wheel of the car retail operation to chief executive Bronte Howson, assisted by CFO Hamish Williams.
Mr Branchi has been managing director for 19 years. He joined the Wheatleys in business just four years after Mr Wheatley’s father Syd started the business with a Perth dealership 52 years ago.
It is understood Mr Wheatley will remain a director of AHG, though his wife Jo will retire from the board.
Amid the musical chairs, the property business will be leaving AHG’s West Perth address for temporary digs until it can purchase a new home, most likely in the Subiaco area.
Ms Wheatley Harris confirmed the move did signal a strategic change for the property business, though it has dabbled in non-automotive property development in the past.
In recent years it was involved in a major subdivision in Canning Vale.
Most of its assets, though, are car yards and showrooms associated with about 20 dealerships that AHG controls selling a vast array of consumer and commercial vehicles.
The AHG story has some parallels with the Perron Group which started off in the motor vehicle business through the WA Toyota franchise but became involved in property in a big way in the 1970s.
However, Ms Wheatley Harris did not want to overplay the scale of the property business, pointing out that the asset base was small compared to long-term property specialists such as Satterley Property Group and Hawaiian Investments.
“Property was not the focus but we recognised that one of the cornerstones [of car retail success] is you own your own property,” she said.
“It is a by-product of the retail business.”
Ms Wheatley Harris said the group believed there was a greater opportunity for growth although any expansion would be done within strict parameters.
“There are certainly things we don’t want to do because our knowledge base is limited and we are risk averse,” she said.
“We don’t want heartaches and headaches.”
The business would look at residential-style developments, especially medium-to-longer-term investments that required patient capital, but realised that the property cycle precluded some areas.
“We are very much open minded about what we want to do.
“We have a few targets in mind and have already approached those and had a chat to see if there is a way to do business. They have come back with some opportunities and we will have a look at that.”
“You have to pick and choose.
“We are able to do land banking because we have a strong capital base. I think there are pockets of available land that, if you can land bank for a couple of years, you will do well.”
The property business is currently focused on building two new motor vehicle dealer-ship sites, including one in Wangara and is refurbishing four others.
AHG was ranked as WA’s second largest private company by revenue in the 2004 WA Business News Book of Lists, though it is likely to take the number one place next year because list leader Multiplex was floated on the Australian Stock Exchange after the list was compiled.
The company is estimated to turn over more than $1.1 billion a year, putting it slightly ahead of construction giant BGC and Kerry Stokes’ private business Australian Capital Equity.
