You know what they say about bankruptcy, it’s a fresh start for those willing to take the leap. In this case, however, it is not the bankrupt company making a fresh start, it is a client.
Global electric vehicle company Vmoto (ASX: VMT) is set to buy its UK Distributor, the UK Distribution—part of the GreenMo Group B.V., and its administrator Vmoto Soco UK for $1 million in cash. The Company will buy UK Distribution’s business and some of its assets.
Last month, Vmoto informed that electric vehicle rental company GreenMo Group had filed for bankruptcy in its home base: the Netherlands. GreenMo was a strategic B2B partner for the Company, providing rental and other services to consumers in the UK. Even as GreenMo hired administrators to assist with company restructuring, Vmoto realised that it simply couldn’t risk it.
Vmoto’s Managing Director, Charles Chen, is looking at the silver lining. He said, “This is a strategic acquisition that provides Vmoto with discounted assets and direct access to over 50 active B2C dealers in the UK, which is a large EV market for the Company and will allow Vmoto to further expand its presence in the UK with an established management team.
“Direct sales to the B2C dealers will also allow Vmoto to earn higher profit margins and focus on growing the UK market share with more focused support.”
UK Distribution has been Vmoto’s partner for selling their electric vehicles in the UK since 2015. Together, they’ve made some serious cash – a whopping $7.7 million by 2022, with the UK arm selling the most electric motorcycles in several years. UK Distribution is the sole UK importer and distributor of Vmoto and Super Soco branded electric motorcycle products.
But current circumstances have brought this romance to a close.
As part of the acquisition, Vmoto will gain access to the distributor’s dealers/customers list, management team and employees, stocks, and fixed assets at discounted prices. Vmoto Soco UK will continue its operations in Newark, UK for two months while relocating its operations to Navenby, UK. Vmoto Distribution UK will no longer carry the Vmoto name.
Vmoto remains largely unaffected as it comes off of a profitable FY22. It recorded international unit sales of 33,687 units, up 13% on FY21 and about 60% on FY20. As it exceeded pre-Covid level sales, the Company’s total revenue shot up by 35% on FY21 to $116.7 million.
It has a strong net cash position of $28 million, with no bank debt as of December 31, 2022, and reported a net profit of $10.3 million.
It also has a positive outlook for FY23. By December 2022, the Company had firm international orders for 8,046 units, which are expected to be delivered in Q1 FY23. In the final quarter of FY22, it signed and renewed distribution agreements with international distributors, including those in the Czech Republic, Greece, Slovakia, France, Moldova, Jamaica, and India covering the warehousing, distribution, and marketing of its B2C and B2B range of electric two-wheel vehicles.
By 2027, the global EV market is expected to grow four-fold into a $2 trillion market.
Alinda is a Business Reporter for The Sentiment
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