Earlier in the year there was speculation that CVC Capital Partners, owner of the Kwik-Fit Group, was considering floating the business on the stock market. Wider concerns about the underlying health of the operation seemingly deterred the private equity group, but strong performance by the fleet arm may now prompt it to reconsider an IPO.

The UK’s leading fast fit repairer for corporate business, Kwik-Fit Fleet, has announced a 19.2% rise in turnover for the first six months of 2004 from a year earlier. The company’s turnover for H1 totalled £65 million, up from its previous record of £54.6 million in the same period last year.

Since Kwik-Fit’s acquisition by the private equity group CVC Capital Partners in November 2002, it has invested significantly in the fleet sector, re-focusing on fast fit activities for fleets and exiting certain activities that did not fall into that category. In the UK, the company has also targeted the small and medium sized fleet successfully, enabling Kwik-Fit Fleet to strengthen its position in this sector.

A raft of improved fleet management services, including an expanded fleet service call centre, has resulted in a string of major contract wins with some of the biggest contract hire and leasing companies in the UK corporate sector.

The strong performance of the fleet operation is encouraging news for CVC, which has been forced to undertake a major restructuring of the whole Kwik-Fit operation since it came under its stewardship. Indeed, some parts of the business remain a significant concern: the strategically important exhaust market is in long term decline and the tyre market remains very competitive.

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Back in March, Tim Parker, then chief executive of the Kwik-Fit group, was evaluating a possible flotation of the chain on the stock market. Parker has since departed to run CVC’s latest acquisition, the AA. However, CVC’s intention to exit the fast fit business was clear and, if the performance of Kwik-Fit Fleet is evidence of a wider turnaround at the company overall, it may choose to reconsider the idea of a flotation.

SOURCE: DATAMONITOR COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.