Auto parts and accessories seller Bapcor saw its shares jump more than 6% yesterday after it fought off a weak trading environment to post a solid rise in profit.
The company said that despite the “softer underlying economic conditions”, net profit after tax was up 5.1% to $45.3 million.
The $2 billion company, which has brands including Autobarn, Midas, and ABS under its banner, also saw strong sales growth, with revenue up 10.4% to $702.5 million for the half.
And further reflecting that the company will pay a fully franked dividend of 8 cents on March 13, up 6.7% on the first half of 2018-19.
It’s no wonder investors loved the result (a rarity in consumer-facing sectors at the moment) with high revenues, profits, and dividends) and sent the shares up 6.1% to $7.11. They were up more than 7% at one stage.
Comparable sales for Bapcor’s Burson trade division increased 5% for the half but stayed flat at Autobarn due to slower sales at its 68 franchised stores.
Margins on the company’s earnings before interest, tax, depreciation, and amortisation eased 0.6% however, marking the first-ever margin decline for the company since listing.
“[This] mainly reflects the impact of the competitive environment, especially the trade businesses in Australia and New Zealand, as well as the impact of the depreciation of the Australian and New Zealand currencies and the softer underlying economic conditions,” CEO Darryl Abotomey said in yesterday’s release.
The company did not provide a detailed outlook for the full year (which the market ignored for the moment) but noted same-store sales had continued in January and overall performance was in line with expectations.
