Shares in automotive parts retailer and wholesaler, Bapcor jumped to a record high on Monday after the release of its first-quarter update which showed Australians are spending more keeping their existing cars roadworthy and going.
The company reported sales growth of between 47% and 50% year on year in the September quarter for its key retail and wholesale businesses.
Bapcor advised that it is expecting a strong first half result in February.
But it can’t give guidance for the full year because the second half remains unclear due to the current economic uncertainties and any potential government restrictions.
The news saw Bapcor’s shares close up 6% to $8.08 after the company told the ASX that it had started the 2021 financial year strongly despite the negative impact of Government-imposed restrictions in Victoria and Auckland (in NZ).
For the three months ended September 30, Bapcor said group revenue was up 27% from the first quarter of 2019-20 a year ago thanks to strong rises in its retail and specialist wholesale businesses.
The Retail business saw a 47% surge in revenue thanks to a 36% jump in same-store sales at its Autobarn chain and AB Company same-store sales growth of 50% in the three months.
The Specialist Wholesale business saw a 45% increase in revenue. This was partly due to acquisitions, with revenue up 18% excluding them.
The company saw a 6% increase in New Zealand revenue and a 10% lift in Burson Trade revenue. The latter was driven by a 7.7% increase in same-store sales. Excluding its Victorian stores, Burson Trade same-store sales were up a solid 17%.
Bapcor’s CEO Darryl Abotomey said the strong start to the new financial year, despite the headwinds is another example of the resilience of the automotive sector.
He said it has been assisted by the increase in sales of second-hand cars, reduction in use of public and shared transport modes, and government stimulus.
New car sales are down more than 20% so far in 2020 compared to 2019 but car dealers report rising prices for good quality second hand cars since the pandemic started in February-March.
Bapcor said it expects the impacts of COVID-19, including the expected increase in domestic tourism and increased use of vehicles, to continue to drive its businesses.
Bapcor said it is continuing to invest more in its information technology, marketing, process and system upgrades, and capital investment in facilities to increase its footprint and drive improved efficiencies.
And while these investments will increase costs, management expects it help underpin further profit growth in the future.
Mr. Abotomey said the biggest growth categories at the Autobarn chain have been seat covers, roof racks, dash cam equipment and replacement radios and stereo equipment.
