There was never any doubt that Kwik-Fit was a master of fitting new new tyres or fixing dodgy exhausts. There was a nagging worry, however, that it would struggle to continue to grow so rapidly as its chain of centres reached saturation point in the UK.
But Kwik-Fit has shown it can use its brand name to tap into new markets. Its motor insurance has taken off in a big way. The group has been able to use its captive customers to peddle new policies and sales are expanding apace. That could just be the beginning. Kwik-Fit believes it can eventually supply any service related to motoring. And expansion into Continental Europe is continuing apace.
The shares leapt 79p to 511p yesterday as the group announced that pre- tax profits motored ahead 27 per cent to pounds 55m in 1997, smashing City forecasts. Analysts have upgraded current year profits to around pounds 63m, putting the shares on prospective p/e ratio of more than 20. After such a sharp rise Kwik-Fit shares are not cheap and insurance profits are still unpredictable. However the shares are a solid long term hold.Reuse content