Haynes Publishing – HaynesPro

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Haynes (LSE:HYNS) is most famous for its paper vehicle manuals.  But today that business accounts for only one-quarter of turnover.  Around one-half of turnover and virtually all profits come from supplying information online to 60,000 mechanics all over Europe. It is in this hi-tech business that we are most likely to find an economic franchise, especially given the duopolistic nature of the industry in most of the countries in which it operates.  In some, such as Germany, 70% – 80% of garages receive technical information from HaynesPro.

Vivid

Haynes became the market leader in Continental Europe when it acquired the entire share capital of a Dutch company, Vivid Holdings, in 2008.  At that time, it supplied data in 19 languages (now 27) having grown from a tiny start-up founded in 1995 as the first European company to offer automotive technical data via the Internet. Vivid was rebranded HaynesPro in 2012.

Haynes holds on to good people. One of the founders of Vivid, Alex Kwarts, joined Haynes’ Group Board in 2010 and is now the irrepressible Chief Technology Officer across the Group. Peter Van Der Galiën, another livewire, was appointed Vivid’s Marketing Director in 2009.  He is now on Haynes’ main board as MD Haynes Professional.  Out of Haynes’ 271 employee total, 200 work in the Netherlands.

While HaynesPro was the dominant supplier in some Continental countries it was in second place in the UK, behind Autodata.  Vivid/HaynesPro didn’t supply data directly to UK garages, but sold it to CarweB’s E3 Technical. These companies, working in partnership, took one-quarter of the market.

As well as repair and maintenance information E3 Technical are the experts in VRM (Vehicle Registration Mark) look-up.  They clean up the data for the DVLA, which can then be sold by E3 to any company that needs VRM on their websites.  Using E3 the garage mechanic can type-in Reg and VIN number to obtain make, model and engine type on a diagnostic scanner selection screen.

E3 charges garages about £12 per month for a basic package including VRM look-up and service information.  If wiring diagrams, guided diagnostic and fault codes are also needed this is about £50pm.  Also valuable to busy mechanics is the helpline – call-backs within 30 minutes to assist with a tricky repair, etc.

E3 absorbed into Haynes

In early 2017 the American company, Solera, which owns AutoData, the 65% – 75% market share player in the UK as well as having high market shares on the Continent, decided to buy CarweB for £340m.  The combination of AutoData and CarweB’s E3 would mean that at 85% – 95% of the UK market would be controlled by one firm.

The Competition and Market Authority report into the merger gives us considerable insight into the nature of competition in this industry:

“ the CMA believes that [AutoData and E3] compete closely as the two main suppliers of RMI [Repair and Maintenance Information]  platforms in the UK, with a combined share of supply of [85-95]%….

…..the other suppliers of RMI platforms in the UK – TecAlliance, AllData, Hella Gutmann and HaynesPro – impose very limited constraints on the merged entity. They have a small share of supply in the UK.

Moreover, some of the products offered by these competitors are different and used for other………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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