The Bouchammaoui and Chabchoub groups, the original consortium buyers of City Cars through the Automobile Investment Company, have now been joined by the Horchani group in the capital of the City Cars car dealership. The group’s financial arm, Horchani Finance, has just announced that it has now reached 10% of the dealership’s capital and that it intends to continue to acquire shares in this listed company.
Operating in a sector in which the four dealerships saw their total sales increase by 12.4% in the first half of 2003, to 554 MTD compared with 493 MTD in the same period last year, City Cars seems to have caught the eye of the astute investor in the Horchani group, which is already present in the agri-food, finance, tourism, industrial and commercial sectors.
Reasons for a good investment: 4th largest trader and 2nd best seller
Diversification is certainly not a bad strategy, especially as City Cars is the fourth largest dealer, with a market share of 9.68%, and at the end of July was the second-best seller of vehicles, just behind its “fake brother”, as they are dealers of the same South Korean conglomerate, Hyundai Motors.
In the first half of 2023, City Cars’ revenues increased by 4% to 146.853 MTD, compared to 141,272 MTD in the same period of 2022. During the same period, income from investments amounted to 5.544 MTD compared to 4.742 in the corresponding period of 2022, an increase of 16.9%. A new official branch was opened in Gafsa in June 2023, bringing the total number of official branches to 22.
15.3 MTD for the State, including 1.7 MTD for solidarity
At December 31, 2022, operating income exceeded 331,337 MTD and operating profit was 38,814 MTD. After low net financial charges of less than 877 thousand dinars, high investment income of almost 6.5 million dinars, and after corporate tax of almost 15.391 million dinars (subject to 35% from 2019 and with 1.738 million dinars in solidarity contributions), the company Bouchammaoui & Chabchoub closed the financial year with a net profit of 28.581 million dinars. The consolidated result, since City Cars also has subsidiaries (City Cars Gros, Logistic Cars and Green SICAR), is higher, rising last year to just over 30.325 million dinars.
And like almost all listed companies, City Cars is subject to tax audits. The auditors reported that the company has signed a settlement agreement with the tax authorities in relation to the in-depth audit of its tax position for the 2018, 2019 and 2020 financial years, agreeing to pay TND 194,487.
It sells cars, but not just cars!
But this company didn’t just sell cars and collect dividends. It also used them as a vehicle for investment and value creation. In 2022, it bought 1,090,000 shares (3.347% of the capital) in Union Internationale de Banques (UIB) at a total cost of TND 15,903,000. Being backed by a bank can only be good for the company.
In March 2019, City Cars signed an agreement with HBG Holding for HBG Holding to repurchase 100,000 shares issued by Al Hidaya Agricole at a nominal value of TND 10 per share. This buyback by HBG Holding, of which City Cars is a subsidiary, is scheduled to take place from January 1 to March 31, 2025. In February 2020, the Bouchammaoui family company also signed another agreement with HBG Holding for the purchase by HBG Holding of a further 200,000 shares in “Al Hidaya Agricole”, scheduled for March 2026.In March 2020, City Cars signed an agreement with Tawasol Investment SICAR (TIS) for the management of a TND 1,000,000 venture capital fund. The Bouchammaoui, Chabchoub and Horchani company is thus also involved in venture capital, which is another form of investment, usually in the form of money, made available to a young company.