Slide 1: Development of a Bicycle and Accessories Retail Business
For personal use only Super Cheap Auto Group Development of a Bicycle and Accessories Retail Business Acquisition of Goldcross Cycles Peter Birtles – Managing Director 13 May 2008
Slide 2: Acquisition rationale and agreement to purchase Goldcross Cycles
For personal use only • Super Cheap Auto Group has been analysing a number of opportunities to develop a new category killer retail business • The Group has determined that a value creating opportunity exists to build a national chain of bicycle and accessories stores • The Group has decided that th
Slide 3: The Bike Market (i)
1: The Bike Market (i) For personal use only • The Bicycle and Accessories market is estimated at over $1bn (Source: Bicycle Industries Association 2006) • New bike sales continue to grow: • 2007 – 1,427,738 • 2006 – 1,199,854 • 2005 – 1,168,601 • 2004 – 1,247,991 • 2003 – 1,003,844 (Source: Austral
Slide 4: The Bike Market (ii)
1: The Bike Market (ii) For personal use only • The Bike Market is highly fragmented • There are over 1,300 independent bike stores • K-Mart and Big W service the budget end of the market and children's bikes • There is the emergence of retail chains with Goldcross in Melbourne and the franchise cha
Slide 5: The Retail Opportunity
2: The Retail Opportunity For personal use only • To develop a chain of 50 category killer bike and accessories superstores across metro Australia. • The stores would offer the widest and deepest range of bikes, accessories, parts and apparel, supported by servicing and fitting, catering for the nov
Slide 6: Leveraging The Group's Capabilities
3: Leveraging The Group’s Capabilities For personal use only • The development of the bicycle and accessories retail business will leverage the Group’s core competencies: • Store Development • Retail Operations • Range Management • Own Brand Development • Overseas Sourcing • Marketing and Promotion
Slide 7: Goldcross Cycles
4: Goldcross Cycles For personal use only • Goldcross Cycles is the largest wholly owned chain of bicycle retailers in the country with a network of 11 stores in the greater Melbourne area. • The business has been operating for 30 years. The Head Office is above the Narre Warren store. • The busines
Slide 8: Summary of the Agreement
5: Summary of the Agreement For personal use only Goldcross Cycles Pty Ltd • To purchase 100% of the issued share capital for circa $6m • Final value based on stock value at completion • Debt assumed on completion circa $5m • A performance related payment payable in August 09 of up to $3m based on p
Slide 9: Financial Impacts
6: Financial Impacts For personal use only • Goldcross Cycles is not expected to make a positive EBIT contribution until FY10 • Acquisition costs and business development costs will be around $0.5m in FY08 • Business development and store opening costs will total around $4.0m in FY09 • FY09 EBIT pre