This morning Bapcor Ltd (ASX: BAP) reported a net profit from continuing operations of $43.1 million on revenue of $636.1 million for the six-month period ending December 31 2018. The profit and revenue were up 9.2% and 5.5% over the prior corresponding half.
The car parts supplier will pay an interim dividend of 7.5 cents per share on pro forma earnings of 16.2 cents per share, which represents growth of 7.1% and 5.9% respectively.
Bapcor's CEO Darryl Abotomey described market conditions as "challenging" and stated the group expects to achieve full year net profit growth around 9% which is at the lower end of previous guidance.
In response to the news the stock has fallen 9.5% to $5.81 as the growth is below investors' expectations.
Bapcor's 'trade' and 'specialist wholesale' segments grew revenue 4.8% and 7.8% over the period as the group added eight new stores over the half to take its total to 178.
Bapcor's newly-acquired New Zealand business also performed "solidly" with revenue up 4.9% and EBITDA up 20.6% on a normalised basis.
Mainly as a result of its recent New Zealand and Commercial Truck Parts Group acquisitions net debt stands at $350.9 million on 2.1x trailing 12 months EBITDA. This is relatively high for a business with some cyclicality and is something investors will factor into calculations over fair value for the group.
Other companies involved in the automobile trade have also reported poor conditions over the last 12 months including AP Eagers Ltd (ASX: APE), Automotive Holdings Group (ASX: AHG) and classifieds business Carsales.com Ltd (ASX: CAR), which reported a weaker-than-expected result today.
Overall this is a reasonable if unspectacular result for a business with an excellent track record that continues to offer growth prospects.
