Reporting Season

Bapcor shares falter as flat earnings growth expected for FY22

Wed 09 Feb 22, 11:40am (AEST)
Automotive Car Parts

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Key Points

  • Lockdown restrictions and higher costs capped any upside for Bapcor earnings
  • The automotive retailer expects a strong second-half as restrictions ease
  • Market does not seem pleased with flat earnings growth forecast for FY22

Bapcor (ASX: BAP) managed to deliver some degree of top-line growth despite the significant impact of lockdowns in the first-half of FY22. 

Financial results at a glance: 

  • Revenue of $900m, up 1.9% 

  • Net profit of $61m, down -13.7% 

  • Net profit was in-line with the full-year guidance provided in October 

  • Interim dividend of 10 cents per share, up 11.1% 

Bell Potter and Citi were expecting a profit figure of $65m.

Morgans was perhaps a bit more forgiving, forecasting first-half profits of $57.1m and flat revenue growth. The broker said early indications of second-half trading will be key.

Bapcor shares are down -3.9% at 11:20 am AEDT.

Post-lockdown momentum 

Bapcor said business conditions improved as lockdown restrictions were eased around November.

Revenue in the December quarter was up 4.1% compared to the September quarter. Bapcor expects the momentum to continue through to the second half of FY22.

Margins were impacted due to a higher cost base as the business transitioned to a new Victorian distribution centre and supported team members during lockdown (paid pandemic leave, avoided standing team members down).

Bapcor said current margins were at the same level as FY20, and expected to improve as the business comes out of lockdowns.

FY22 outlook 

Leading into today's result, Morgans said that a "44/56% earnings skew [will be] required to meet the guidance statement".

Bapcor said January 2022 revenues are in-line with the previous year, despite a "slow start to the year due to Omicron".

M&A could play a big part in the year ahead, as Bapcor hinted at "further acquisitions in 2022 to supplement organic growth".

Since 31 December 2021, the company has signed 2 acquisitions which have added annualised revenues of cira $50m.

Bapcor concluded its earnings on a weak note, saying it hopes to deliver "pro forma earnings at least at the level of FY21."

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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