Bapcor FY24 Earnings Call Highlights

Bapcor (ASX: BAP) has reported a sizeable full-year loss, due to asset impairments and difficult trading conditions. The challenging trading environment has been well-documented in recent months.

Despite the tough economic climate, the market appears to be rewarding Bapcor's ongoing cost-cutting efforts. Shares in the company are up around 3.3% as of noon on Wednesday.

FY24 Earnings Summary

Bapcor provided an trading update in early May. Most of today's numbers were in-line with the update.

• Revenue up 0.8% to $2bn

• Pro-forma EBTIDA down 10.1% to $268.4 million

• Pro-forma NPAT down 24.3% to $94.8 million

• Statutory net loss of $158.3 million

• Dividend down 31.8% to 15 cents per share

• Net debt up 33.9% to $337.1 million

Earnings Call Highlights

The below topics have all been answered by Interim CEO Mark Bernhard and CFO George Saoud.

FY24 Performance: "Pro forma NPAT was in line with the guidance we provided in May ... Despite the difficult trading conditions, pleasingly, three of our four businesses either delivered a steady or growing top-line result with a 0.8% growth overall to $2 billion."

Market share: "Despite some market commentary, we continue to enjoy strong stable market share in the trade segment with independent repairs, and we're growing in key trade accounts, equipment, and in the auto electrical business ... Pleasingly, we maintained or grew market share."

Wholesale segment: "Wholesale was impacted by intense competition, which has had a material impact on the gross margin and EBITDA."

Retail segment: "Retail sales declined due to higher discounting and lower volume sales in our discretionary range."

New Zealand businesses: "New Zealand economy has been especially soft, which impacted second-half trading."

Supply chains: "We've started to rationalise our supply chain network with the planned closure of approximately 20% of our warehouses, which will reduce costs, better utilize our central DCs, and optimize our inventory."

Costs: "Cost inflation, especially employee and occupancy combined with increased technology costs and interest, are negatively impacting NPAT ... We've reduced our head office head count by more than 100 people in Q4 from non-customer-facing roles."

Promotional activities: "Our investment in digital and loyalty has improved sales for Autobarn, and we started to see the benefits, particularly in the second half. Our loyalty members are growing steadily and are now up to 1.2 million."

Analyst Q&A Highlights

New Zealand outlook: "We are starting to see New Zealand turn around. So probably across the board, we're seeing improvements, which is a positive sign for us."

On promotional and discount activity: "The market is certainly very, very competitive, and we're seeing that. We're getting after that at the same time because we obviously don't want to give up any share in any of the businesses."

On savings target: "The $20 million to $30 million is really around the cost and it's all within our control."

This article was generated with the support of AI and reviewed by an editor.