Molson Group’s strategic US acquisitions have significantly bolstered the company’s revenue, albeit at the expense of short-term profitability.
- The acquisition of three US Powerscreen dealerships spurred an 18% increase in Molson’s turnover, reaching £338.0m.
- Despite the overall growth, the UK branch saw a reduction in turnover by £11.5m, dropping to £251.7m.
- Interest repayments from the acquisitions led to a decline in pre-tax profits from £13.0m to £8.1m.
- Molson’s US expansion is partly attributed to its partial ownership by BFG, a private equity firm influenced by UK banks.
In a strategic move to expand its footprint across the Atlantic, Molson Group made significant acquisitions in the United States, acquiring three Powerscreen dealerships in swift succession. The year ending 30th September 2023 marked an 18% rise in turnover for Molson, escalating to £338.0m from the previous year’s £285.8m. However, while the acquisitions fuelled notable growth in the US, they did not come without their drawbacks. The UK operations experienced a downturn, where turnover saw a reduction by £11.5m to £251.7m, highlighting a shift in focus from domestic to international markets.
Molson Group’s foray into the US market included the purchase of 85% of Powerscreen of California in April 2022 at a cost of £14m. The momentum continued with the subsequent acquisition of Powerscreen of Washington in October 2022 for a substantial £31m. Further cementing its US expansion, Molson acquired Arizona-based Powerscreen Western on 31st August 2023, adding to its growing portfolio with a £2m transaction. This strategic expansion underlines Molson’s commitment to strengthening its distribution network of Terex Powerscreen machinery.
While operating profit saw a marginal increase to £15.9m from the previous £15.7m, the financial cost of these acquisitions was reflected in the pre-tax profit, which declined to £8.1m from £13.0m. This decline is primarily due to increased interest repayments triggered by the acquisitions. Molson’s intricate link with BFG, a private equity firm controlled by UK high street banks, suggests a robust financial backing guiding these bold acquisitions.
Molson Group’s strategic acquisitions have expanded its US presence but have affected its short-term profitability.
