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APOLLO Tourism & Leisure's (ASX ATL) aggressive acquisition strategy in Canada and Australia has helped lift the newly listed company to a pro forma net profit of $13.9m, more than 12 per cent above its FY17 IPO forecast.
The recreational vehicle company, which aims to become Australia's leading player in the RV sales and rental market, listed in November 2016 and exceeded all its pro forma IPO forecasts with revenue up by 5 per cent to $177 million.
"We've performed well on the rental side of the business, our retail sales have gone well and overall the little bits and pieces contribute to the overall result," says Apollo MD and CEO Luke Trouchet.
The Brisbane-based company has raised money to fund its acquisition and expansion program which includes the purchase of the TSX-listed CanaDream which is one of the largest RV rental and sales companies in Canada.
Apollo also picked up Kratzmanns, an Australian retailer of new and used caravans and motorhomes along with Sydney RV, and invested in Camplify which is an online RV and caravan sharing community that connects owners with renters.
"The Canadian acquisition is the one we're most proud of and it was certainly the most challenging," Trouchet says.
"They were a publicly listed company in a foreign jurisdiction. Taking over a public company in Australia would be challenging enough but doing that in a foreign jurisdiction was hard.
"There were lots of nuances in there, rules and regulations, there was a tyranny of distance and time so this was a good three-month process. The sheer scale of it was considerable.
"We're a mid-level listed company and it was a big bite for us."
Apollo also announced it was going to acquire the Perth-based George Day Caravans for $9.1 million which means it can add one of Western Australia's most iconic RV dealerships to its stable.
"The first step now is we have to integrate all these businesses we've acquired and then the other exciting thing is we're planning on moving to a 12-acre manufacturing premises because of demand for our motorised products and caravan products.
"Hopefully we'll be able to build a lot more units as dealers around the country demand our product."
The acquisition and expansion program has been rapid but it also serves to protect the company, which relies on the tourist market, from external shocks.
"There are things you cannot prepare for, and we're all about looking after the tourism market and what could affect us is an event outside our control is something like a terrorist attack," Trouchet says.
"We're now geographically diversified across the world so our earnings are not all coming from Australia but there is also a big chunk from North America and New Zealand which all contributes as well.
"Even within Australia, on the rental side we have 10 locations so it's not a concentrated business, so this is why we've diversified our business into rental and into sales and those locations are spread out in each country we operate in."
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