Eagers Automotive Ltd (ASX: APE) shares are trading not far off their all-time high of $15.34. The Eagers share price has managed to shrug off the worldwide disruption of the COVID-19 pandemic. After opening slightly lower today at $15.05, shares in Eagers have surged more than 420% since their March 2020 lows. So what’s been
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Eagers Automotive Ltd (ASX: APE) shares are trading not far off their all-time high of $15.34.
The Eagers share price has managed to shrug off the worldwide disruption of the COVID-19 pandemic. After opening slightly lower today at $15.05, shares in Eagers have surged more than 420% since their March 2020 lows.
So what’s been happening for the automotive dealer?
What’s been driving the Eagers share price?
Late last month, Eagers released its financial results for FY20.
Despite COVID-19 lockdowns keeping consumers away from showrooms, Eagers declared statutory revenue of $8,749.7 million. The result was a strong improvement compared to $5,817 million in revenue for FY19. In addition, the automotive company reported a 102% increase in underlying profit after tax of $140.4 million. Despite the robust figures, the Eagers share price slumped 10% following the release of the company’s results.
Due to the pandemic, Eagers did not pay a half-year dividend nor a final dividend for 2019. As a reward to shareholders, however, the company declared a full-year dividend for 2020 of 25 cents per share, a total of almost $64 million.
In its report for FY21, Eagers cited solid growth in its share of the new vehicle market as well as a more robust performance in its truck retailing segment. The company also noted a stronger performance in the truck retailing market for the full year.
Eagers highlighted the company’s pre-owned vehicle strategy, which delivered strong year-on-year growth. In addition, the company noted improved customer offerings including click and collect and online financing.
Early momentum for FY21 was also reported by the company, with Eagers noting that orders have continued on a strong trajectory for the new financial year. The company expects supply constraints to ease and global manufacturers to re-open throughout the remainder of FY21.
Earlier this month, the Federal Chamber of Automotive Industries (FCAI) released new vehicle sales figures for February 2021. The data highlighted that new-car sales in Australia surged for the fourth month in a row. As a result, automotive companies like Eagers could be poised to benefit as the sector comes back to life.
In addition, the company also plans to radicalise how customers purchase vehicles. Eagers is Australia’s oldest listed automotive retail group, operating more than 230 showrooms across the country.
According to reports earlier this year, the automotive conglomerate plans to construct a mega-complex near Brisbane airport. The facility is expected to host a test track and two dozen showrooms. In addition, the company also plans on expanding new-car showrooms to shopping malls from the end of this year.
The Eagers share price is currently trading nearly 12% higher year to date.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.