Declining consumer confidence within the oil-dependent economy of Alberta dented sales at AutoCanada Inc.\’s dealerships in the first couple of months of the year, but the company isn\’t giving up on its aggressive acquisition strategy.
The Edmonton-based dealership group\’s shares tumbled 21% Friday to close at $33.75 after it described the second half of December and also the first two months of 2015 as \”very challenging.\”
Nearly half of AutoCanada\’s 48 dealerships have been in Alberta, where 40% of people are deferring major purchases like homes and automobiles because of the collapse in oil prices, based on a study by ATB Financial which was cited Friday by AutoCanada CEO Tom Orysiuk.
\”With a lot of the company\’s revenue and profit coming from Western dealerships, and Alberta dealerships particularly, this will pose significant challenges,\” Mr. Orysiuk said on a conference call following the release of the business\’s fourth-quarter results.
\”Barring any unforeseen significant improvement, although the company will be profitable, Q1 2015 won\’t equal Q1 2014 results.\”