Bapcor shares are rising after the auto parts business reported.
The post The Bapcor (ASX:BAP) share price is rising after FY21 earnings on Wednesday appeared first on The Motley Fool Australia. –
What was in the Bapcor FY21 result?
The company reported that it saw growth across the business in multiple areas.
Bapcor’s total revenue grew 20.4% to $1.76 billion, with pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) going up by 28.8% to $279.5 million.
Pro forma earnings before interest and tax (EBIT) grew 39% to $200.8 million and net profit increased 50% to $118.8 million. However, pro forma earnings per share (EPS) ‘only’ grew by 26.8% to 38.3 cents.
A large amount of the profit contribution comes from the trade segment (namely Burson Auto Parts), where revenue grew 15.5% and EBITDA increased 19%. Burson added another 14 stores to reach 200 stores across Australia.
Specialist Wholesale revenue grew 26.8% and EBITDA increased 42.2%. Excluding acquisitions, such as Truckline, revenue grew 17.3% and EBITDA rose 32%.
Retail (including Autobarn) saw revenue rise 26.1% and EBITDA increased 20.1%.
The company is expanding into Asia. It currently has six operating locations in the Bangkok region of Thailand, with the seventh ready to open (but delayed until COVID restrictions ease). It also bought a 25% stake of Tye Soon, which has around 60 locations across Asia. COVID has caused a lot of volatility for the Bapcor share price since February 2020.
Bapcor has paused Burson Thailand growth as it continues to recover to pre-COVID levels.
Bigger dividend payout for shareholders
Bapcor’s dividend continues to grow at a double digit pace. The board decided on a 15.8% increase for the final dividend to 11 cents per share.
This meant the full year dividend had been increased by 14.3% to 20 cents per share.
The full year payout represented a dividend payout ratio of 52% of pro forma EPS.
FY22 growth and expectations
Bapcor announced that significant progress has continued to be made in investments to drive the long-term success of the business, which could also influence the Bapcor share price.
It has completed its new distribution warehouse building at Tullamarine in Victoria, with retail having successfully transferred into the facility. A new distribution centre has been approved for Queensland.
Bapcor continues to invest in its digital transformation. The new Autobarn e-commerce platform is being implemented, along with the new business to business platforms in Australia, Thailand and New Zealand.
Management believe there are further opportunities to drive the performance of the business including further network growth, realising operational efficiencies and expansion of its own brand product range.
However, at the moment its goal is to try to achieve pro forma earnings of at least the level of FY21, but it depends on the extent on lockdowns and other government restrictions.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.