Insights

Why the Autosports (ASX:ASG) share price tumbled 7% today

The Autosports Group Ltd (ASX: ASG) share price closed 7% down today after the car retailer announced its half-year results.
The post Why the Autosports (ASX:ASG) share price tumbled 7% today appeared first on The Motley Fool Australia. –

Carsales

The Autosports Group Ltd (ASX: ASG) share price finished 7.3% down for the day at the closing bell. Early in trade, the automotive dealership owner provided its half-year results to the market.

It appears expectations were higher than what was delivered. The Autosports share price declined throughout the day, closing at $1.90.

What was moving the Autosports share price today?

It’s good, but concerns linger

Following a crippling crunch during the peak of COVID-19 shutdowns, Autosports had regathered itself with new-found demand. Due to the implications of the pandemic, people were concerned about public transparent, and others developed a desire to travel locally. These catalysts help lift the car market overall.

According to Vfacts data, December 2020 witnessed a growth of 13.5% in new car sales compared to December 2019.

All of these indicators point towards a great tailwind for Autosports, and so the share price ran to multi-year highs. Yesterday marked a new 52-week high for the share price, at $2.05. Hence, all this exuberance came with high expectations.

So, the results are in – total revenue grew by 7.8% to $903.7 million. This is despite a $48 million impact due to lockdowns in Victoria. Earnings before interest, tax, depreciation, and amortisation (EBITDA) pleasantly increased by 50.4% to $56.2 million. New vehicle sales outperformed used vehicle sales, with an increase of 22.3% compared to a decrease of 7%.

Flowing through to a bottom-line net profit after tax (NPAT) of $16 million. Autosports NPAT was a significant improvement on the $49.9 million loss in the prior period.

As a result of the profit, Autosports declared a dividend of 2 cents per share payable to shareholders.

Shareholders might remain concerned about the 4 dealerships and 2 collision repair sites generating 14% of ASG’s revenues being impacted. Lockdowns have resulted in a 30% reduction in revenues in Victoria compared to the prior period.

Supply and demand rebalancing?

The growth in revenue has largely been a story of supply and demand for many car dealerships. Demand had lifted due to the circumstances, and supply had been capped due to logistics being impacted.

Shareholders may be asking the question then, what happens when the demand returns to historical averages and supply chains get back on track. It’s a warranted question considering the vaccine rollouts and the promise of a ‘normal’ to return once more.

For now, Autosports has advised that January trading has been above expectations. However, revenue growth will be constrained by new vehicle supply.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Mitchell Lawler 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.

The post Why the Autosports (ASX:ASG) share price tumbled 7% today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!