Asbury sees 20% boost in spending
Asbury CEO Craig Monaghan: With the increase, capital spending could reach $110 million to $120 million for 2011-13.
Asbury Automotive Group will bump up 2012 capital spending by $10 million to accelerate several dealership renovation projects.
The move will increase Asbury's capital expenditure budget by 20 percent, to $60 million, not including real estate purchases. The increase will support facility projects that "will significantly benefit our business," Asbury CFO Scott Krenz said.
"As an example, we're building a new showroom and service area for our rapidly growing Hyundai store in the Tampa area."
Asbury, the nation's sixth-largest auto retailer, is planning work on about 20 facility projects in 2012.
About 65 percent of the company's capital spending budget is earmarked for major facility renovations and 15 percent for minor renovations. The remainder is for nonfacility related items, such as technology investments.
Total could rise
But Asbury's capital spending, and the number of facility projects, could grow beyond the current plan, company leaders said last week.
Asbury said it is in discussions with several manufacturers about points. If new franchises result, Asbury is likely to increase capital spending "a little" more for 2012 to support the construction of new dealerships, Krenz said.
Asbury CEO Craig Monaghan declined to say how many points might be added.
"We don't know yet what would come of it," Monaghan said in an interview. "Some of the conversations are maybe add points that we don't necessarily build today, but they might be ones that we would have the option to build down the road."
$8 million in the quarter
Asbury spent $8 million on capital expenditures during the first quarter. It spent $22.4 million in all of 2011, not including real estate purchases.
The spending increase for 2012 will bring Asbury's capital expenditures for 2011-13 to approximately $110 million to $120 million, according to Monaghan.
He had said late last year that Asbury would average capital spending of about $35 million per year, or a total of just more than $100 million for that three-year period.
In addition to the Hyundai project, Asbury is rebuilding several Toyota stores, just built a Mercedes store and is making improvements at several other dealerships.
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