EDMONTON, Feb. 17, 2015 /CNW/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX:ACQ) announced today the Board declared a quarterly eligible dividend of $0.25 per common share on AutoCanada's outstanding Class A common shares, payable on March 16, 2015 to shareholders of record at the close of business on February 28, 2015. The quarterly eligible dividend of $0.25 represents an annual dividend rate of $1.00 per common share.
The Company also announced today that it has received approval from the Toronto Stock Exchange ("TSX") to commence a normal course issuer bid to purchase its common shares on the open market in accordance with the rules of the TSX.
Pursuant to the normal course issuer bid, AutoCanada intends to acquire up to 490,193 common shares, being 2% of the issued and outstanding common shares of the Company. Subject to certain prescribed exemptions and any block purchase made in accordance with the rules of the TSX, daily purchases will be limited to 46,999, which is equal to 25% of 187,996, the average daily trading volume for the Company's common shares on the TSX for the past six months. As of February 12, 2015, there are 24,509,683 common shares outstanding.
AutoCanada is authorized to make purchases during the period of February 20, 2015 to February 19, 2016 or until such earlier time as the normal course issuer bid is completed or terminated at the option of AutoCanada. Purchases under the normal course issuer bid will be made by AutoCanada through the facilities of the TSX and other alternative Canadian trading platforms at the prevailing market price at the time of the transaction. Common shares acquired under the normal course issuer bid will be cancelled.
"As the Company has grown its trailing twelve month net earnings by 38%, equating to an additional $0.43 per common share on a weighted average basis, the Company believes that in view of the economic uncertainty in Western Canada in general, and Alberta in particular, that long-term shareholder value is best supported by retaining capital and investing within our business," stated Patrick Priestner, Executive Chairman of AutoCanada. Mr. Priestner further stated that "The Company believes that the recent volatility of its share price may provide opportunistic purchase opportunities of its shares. Additionally, should the economic uncertainty continue, Management believes that additional acquisition opportunities for premium stores will emerge and that the Company, by focusing on investing cash within its business, has put itself in the best position possible to pursue a patient strategy to take maximum advantage of these opportunities as they arise to best ensure long-term shareholder value."
Eligible dividend designation
For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) (the "ITA") and any corresponding provincial and territorial tax legislation, all dividends paid by AutoCanada or any of its subsidiaries in 2010 and thereafter are designated as "eligible dividends" (as defined in 89(1) of the ITA), unless otherwise indicated. Please consult with your own tax advisor for advice with respect to the income tax consequences to you of AutoCanada Inc. designating dividends as "eligible dividends".
About AutoCanada Inc.
AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 48 franchised dealerships in eight provinces and has over 3,600 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, BMW and MINI branded vehicles. In 2013, our dealerships sold approximately 36,000 vehicles and processed approximately 364,000 service and collision repair orders in our 406 service bays during that time.
Certain statements contained in this release constitute forward-looking information. These statements relate to future events or AutoCanada's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on AutoCanada's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, AutoCanada's stated intention to purchase its common shares and the number of common shares that may be purchased pursuant to the normal course issuer bid are statements containing forward looking information. AutoCanada's annual information form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, uncertainties and other factors, such as changes in business plans and potential delays or changes in plans with respect to acquisitions or capital expenditures, that could influence actual results. AutoCanada disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
SOURCE AutoCanada Inc.
For further information: Christopher Burrows, Vice-President and Chief Financial Officer, Phone: 780.509.2808, Email: [email protected]