Car components group, ARB Corporation (ASX:ARB) , will pay shareholders a higher interim dividend despite only a slight revenue increase of 0.2% in the six months to December 31.
The group reported on Tuesday that revenue edged up to $341.5 million, from $340.9 million in the same period last year. That figure fell short of market estimates, which were around $350 million.
However, these figures belie a solid set of earnings.
The company stated on Tuesday that Profit before tax jumped 12.6% to $72.5 million, representing an increase "after excluding a one-off capital expense of $1.7 million relating to the final estimated payout for the acquisition of the Truckman business."
After-tax profit, excluding the Truckman adjustment, was $52.9 million, up 12.3% compared to the previous corresponding period.
Reported profit for the half, including the Truckman adjustment, was $70.8 million before tax and $51.3 million after tax. This represents an increase of 9.5% and 8.1% respectively over the previous corresponding period, surpassing the 4.1% inflation rate.
The interim dividend was raised by 2 cents or 6.35% to 34 cents a share.
Sales in the Australian aftermarket grew by 3.7% in 1H FY2024, with growth achieved in all Australian states, despite hindrances during the second quarter due to industrial disputes across Australian ports causing extensive inbound and outbound disruptions.
The company continues to implement initiatives to improve fitting capacity and alleviate constraints throughout the half year, with current customer orders remaining strong and new vehicle sales in Australia showing growth, particularly for the Ford Ranger, Toyota Hilux, and Isuzu D-Max.
Export sales declined by 13.6%, offset by strong sales growth achieved in the UK, particularly by the UK-based Truckman business.
ARB focuses on recovering sales lost when its major US customer, 4 Wheel Parts, was acquired by a third party, and anticipates stronger sales in New Zealand after the repeal of the "Ute tax" from January 1, 2024.
Longer-term initiatives are underway to engage more directly with consumers and support US sales, including the establishment of a US e-commerce site, investment in Off Road Warehouse, Inc., and the construction of a pilot ARB branded retail store in Seattle, Washington, expected to open towards the end of this year.
Sales to original equipment manufacturers ("OEM") increased by 53.8% over the period, in line with previous disclosures to the market, with projections for continued growth into FY2025.
