Eagers Automotive: Structural growth under the bonnet

About the author:

Scott Murdoch
Author name:
By Scott Murdoch
Job title:
Senior Analyst
Date posted:
25 August 2023, 9:30 AM
Sectors Covered:
Diversified Financials, Professional Services

  • Eagers Automotive (ASX:APE) delivered 1H23 (vs pcp): revenue +14% to A$4.8bn; underlying NPBT +6.3% to A$207.4m; DPS +9% to 24cps. The result was in-line with expectations.
  • Whilst group ROS fell 30bps (diluted by acquisitions); focused cost management was a highlight. Like for like costs were +4.9% against the high inflationary period.
  • APE expects to deliver FY23 revenue of A$9.5-10bn, with a stronger 2H23 margin outcome. Plenty of med-term structural growth initiatives are in play across: consolidation; strategic industry alliances; leading the EV transition; sales channel optimisation; used vehicles; and new markets (offshore).
  • There will be periods of cyclicality experienced through time, however APE is executing on building a sustainably higher earnings base. Add maintained.

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