Lithia sweeps Shareholder Value retailer awards
DETROIT -- Lithia Motors Inc. swept the retailer category at the 12th annual Global Automotive Shareholder Value Awards in January.
The awards, developed jointly by Automotive News and PwC, recognize the best shareholder return for automotive manufacturers, suppliers and retailers.
Lithia Motors won both the one-year and three-year awards, which were presented during the Automotive News World Congress.
Measuring shareholder value for the awards is simple: Calculate how the value of $100 invested in a public company changes during the period, counting share price and assuming any dividends are reinvested.
In a second year of recovery for the U.S. auto industry, "delivering shareholder value is on the top of the minds of automotive executives," said Rick Hanna, global automotive leader for PwC.
Over one year, Lithia achieved a 55 percent return to lead all public dealership groups. The sector averaged a 25 percent gain.
Over three years, Lithia's share value increased almost sevenfold. That's more than double the growth rate of the retailing sector, which itself almost tripled.
Lithia, of Medford, Ore., ranks ninth on the Automotive News list of the top 125 dealership groups, with retail sales of 33,790 new vehicles in the United States in 2010.
PwC credited the sector's bounce to three factors: higher profits from continued financial and operational restructuring, better credit availability and fewer competitors after U.S. dealer consolidation.
The financial returns show the value of continued investment despite a difficult economic environment, Hanna said.
Photo credit: GLENN TRIEST
The high three-year returns compare the fourth quarter of 2011 against the end of 2008, when U.S. auto sales were collapsing and investors fled the auto retailing sector.
Lithia Chairman Sid DeBoer is still focused on maximizing returns. "As we remain disciplined on controlling costs, incremental operating leverage demonstrates the earning power of our company," he said in a statement when the retailer released its most recent quarterly results in October.
As of October, Lithia operated 86 dealerships in 11 mostly Western states.
Lithia finished 2010 with revenue of $2.1 billion. It has not reported full-year 2011 results yet but has issued guidance that it expects revenue to be between $2.6 billion and $2.7 billion.
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