RPM Automotive expands footprint in Australian automotive aftermarket by purchasing Gully Mobile Tyres

RPM Automotive Group Ltd (ASX:RPM) has extended its position in the Australian automotive aftermarket with the purchase of specialised Victorian tyre business Gully Mobile Tyres Pty Ltd. In line with a sales and purchase agreement, RPM has acquired 100% shares of Gully Mobile Tyres for $ 95,000, comprising of $35,000 in cash and 680,851 RPM shares. Gully Mobile Tyres is a well-established business and has been providing specialised tyre services in Victoria for the past 20 years. It operates in a very specific and highly skilled niche of the tyre industry, that of the sales, service, repair and replacement of heavy commercial and earthmoving equipment tyres also known as Off-Road Tyres or OTR. “Great fit for RPM” RPM chief executive officer Clive Finkelstein said: “The acquisition of Gully Mobile Tyres is a great fit for RPM. “The inclusion of Gully into the RPM Group will strengthen our team significantly by broadening our service offering in this space and providing RPM with the resources to handle any tyre servicing application. “This acquisition, while relatively small is strategically significant as it compliments a number of our subsidiaries and provides RPM with further control of our supply chain.” Shares have been up to 5.5% higher to 20 cents intra-day. Encouraging results Despite challenges associated with the COVID-19 pandemic and government-imposed restrictions, RPM exceeded its turnover budget and effectively met its earnings before interest and tax projection in FY20. The company’s revenue for the 12 months period ended on June 30, 2020, stood at $34.69 million while its EBIDTA for the year was $3.44 million. RPM also achieved a gross profit of $10.67 million during FY20.