Interview of A.J.Denny (AAA Auto) about shares price and its outlook

The website Kurzy.cz, together with AAA Auto, has prepared an interview with the CEO of the company Anthony J. Denny about the current situation and the outlook of the company's shares and about the conditions on the retail of used cars.

1) In September 2007, the share subscription was 55 CZK; the present price is 18 CZK. Are you happy with this evolution?

Most definitely not. However, regarding the fact that last summer its price was approx 9 CZK, I am somewhat happy that the price is increasing. During this year, the share valorization is a result of positive news about our company’s finances. And one last remark concerning the subscription part: a KBS analysis has shown that the optimum price would have been 1,98-2,50 EUR, our indicated price was approx 2,25 EUR and the shares have been subscribed twice to this level. Finally, we opted for a price of 2 EUR that we felt represented the adequate value at that particular time.

2) Is the present state due only to the crisis?

I would say that although we cannot make the crisis responsible for all, it has nevertheless had a great impact on shares value. To be specific, I mean that the present shares price does not correspond to its real value and it does not concern only AAA, but also many other companies. 

3) According to you, what would be a fair price, i.e. at what level should AAA shares be right now?

I would say it that way: the price should take into consideration that our company fulfilled its promise to successfully realize its restructuring program and return to profitability. From my position I cannot speculate about the specific future price of the shares, I am nevertheless convinced about the long-term growth potential of our company.

4) Did the shares subscription bring some competitive advantage to your company? Apart from higher financial sources?

I don’t think that the shares subscription had a direct impact on our business due to the fact that we floated (IPO) just before the crisis. On the contrary, due to our business orientation, we have been often subjects to critics that hadn’t been always objective.

5) What changes did the crisis bring? From the point of view of the whole sector, of the company and of the customers.

In one word, prudence. The used-cars retail segment continues being uncertain and its current evolution doesn’t reflect the macro-economical changes, the consumer’s behavior is hesitating and, even if we had perceived some moderate signs of market recovery, we have to consider it cautiously. And concerning our company, prudence is also prevailing due to the experience that had been brought by the crisis. It had been a test for the company that we are confident we passed.
6) Did the crisis have also some positive impact?

Yes, if we speak about the gained experience.

7) In the newspapers, we have read about your revived expansion plans in Russia. Does it mean that the outlook for the whole sector is being generally better or that the situation in Russia is somehow exceptional?

The expansion towards Russia was precisely one of the projects that we had to postpone because of the crisis. We are continuously analyzing the conditions of our entry into the Russian market, as well as possible partnerships, and if all facts will turn out well, we’ll make the expansion.   

8) Do you expect any revolutionary novelty in your sector?

If considering the past year, I have to say no. it will all of course depend on the economy evolution and on the related consumer’s behavior, things that we always have to take into consideration. For example, this year we have been surprised that despite the crisis, the demand for luxury cars has increased, during the summer for cabriolets and now, in the autumn time, people buy mostly four-wheel drive cars, especially in the SUV category.