Boyd Group Services revenue surpasses US$2B

Boyd Group Services Inc., the Winnipeg-based company that owns 860 collision repair shops in Canada and the U.S., cracked the US$2 billion mark in revenue last year, hitting US$2.4 billion.

And it did so while dealing with an acute shortage of technicians, rising parts prices, rising wages and price increases that aren’t rising as fast as cost increases.

But business was so strong the company closed 23 intake centre locations to house upcoming work because demand for collision repair services exceeded Boyd’s capacity.

After revenue declined in 2020 during the first year of the pandemic, revenue was back up 30 per cent over 2021.

The company added collision repair 23 locations last year and Tim O’Day, the Chicago-based CEO of Boyd, said the company is on track to achieve its growth goals of doubling the size of the business from 2021 to 2025 using 2019 sales as a starting point.

“We made a lot of progress in a difficult, disrupted environment with parts challenges and labour challenges,” O’Day said in an interview with the Free Press.

On the labour front, the collision repair industry is as hard hit as any sector, maybe harder. According to CCC Intelligent Solutions, a technology solution provider to the collision repair industry (and many others), the technician shortage is one that will be a drag on industry capacity for years to come.

“As shops compete for a smaller number of technicians, and as repairs continue to become more complex requiring new skill sets, many shops have indicated they cannot repair as many vehicles at the same time as they did before the pandemic,” it stated in a recent report.

Not only that, wages are rising at a much faster pace than in previous years and average weekly wages for all employees within a collision shop outpaced wage increases across all industries in 2022 after having trailed that average between 2018-and-2021, it said.

It is a big issue Boyd has to deal with just like the rest of the industry, but the company was on the case well before the pandemic began. In 2017, it started its own technician development program, and although it was scaled back at the start of the pandemic, it was relaunched in 2021.

Last year, the company said it would double its technician development program by the middle of this year, but it hit that mark in November, growing from 200 participants to 400.

The 18-month training program to become collision repair technicians has been very successful, O’Day said.

“We are using the program to spearhead our inclusion, diversity and equity efforts to recruit people under-represented in the company,” he said. “For example we have a number of women in the program. Four or five years ago that was not the case.”

During the fourth quarter, Boyd added 12 locations and another 17 during the first part of this year.

With 56 per cent of the 30,000 collision repair shops in North America still independently owned, O’Day said the pipeline for acquisitions is still strong. While Boyd has to compete with other private equity-backed collision repair consolidators, he said the company continues to gain market share.

In a note to his clients, Zachary Evershed, an analyst with National Bank of Canada Financial Markets, said the company is doing all it can to increase technician capacity.

“But we believe balancing supply and demand for labour ultimately depends on broad wage increases to attract talent from adjacent industries,” he said. “To this end, Boyd remains in continued negotiations with the insurance companies to secure price increases to support higher labour rates.”

In an analyst call on Wednesday morning, O’Day said he expects the drag from labour issues will gradually lessen as wage increases stabilize and pricing matures.

During the fourth quarter, net profit was US$14.2 million, up from US$4.9 million a year earlier.

Sales in the quarter were nearly US$637.1 million, up from US$516.2 million a year earlier.

Same-store sales for the quarter rose 20.7 per cent compared with a year earlier.

The company increased its dividend for the 15th consecutive year to an annualized amount of $0.59.

martin.cash@freepress.mb.ca