Chances are that when you pop into the showroom to pick up your used Volkswagen Golf, it has passed through the hands of BCA Marketplace.
BCA is the spine that links what it says are 50% of car movements in the UK. Its services range from transporting new cars from ports to dealerships, to buying second-hand vehicles via its webuyanycar.com website, to selling them at its British Car Auctions sites.
Founded as an auction house in 1946, its growth was turbocharged in 2015 when it was bought for £1.2bn from buyout firm Clayton, Dubilier & Rice by a listed acquisition firm, Haversham Holdings, in a reverse takeover.
That deal was driven by Avril Palmer-Baunack, the fiery Scot whose career has been spent in the car distribution and logistics industries. The 54-year-old has made a fortune from BCA. In December she and three fellow directors were handed private equity- style share awards. Palmer-Baunack, the executive chairman, raked in shares worth almost £29m.
What followed has hardly inspired investors. A few days later — the same day those new shares began trading — two of the lucky recipients resigned from BCA’s board “with immediate effect”. Non-executive directors James Corsellis and Mark Brangstrup Watts, both partners of Marwyn Capital, which was behind the reverse takeover, left with £19m worth of new shares between them. In February, Palmer-Baunack sold £1.1m of shares.
The shares plunged 30% between December and March, although they have since clawed back some of their losses to end last week at 193p, valuing it at £1.54bn.
That is just the corporate governance side. While BCA has been growing profits and revenues strongly — up 31% and 29% respectively in its latest half-year figures — the business is piling up risk.
Webuyanycar has moved BCA from its core of collecting commission via auctions to making a margin from buying and selling cars. This has driven revenues substantially, but means it now holds, albeit temporarily, the value of these cars on its books.
Then there is car finance. BCA has got into this in a big way, and in September it financed 11.3% of all vehicles it sold. That left it with a loan book worth £123.7m.
All this comes as the car market looks fragile. New car sales are in reverse, and a glut of three and four-year-old lease cars is heading for the market, threatening to drive down prices. With £287.4m of debt, a looming price crunch and rivals disrupting online deals, BCA is one to avoid.
