The Bapcor Ltd (ASX: BAP) share price has surged from the open on Tuesday after the company posted its FY24 results.
At the time of writing, shares in the vehicle parts and accessories business have climbed 2.6% to $5.06 apiece.
In contrast, the S&P/ASX 200 index (ASX: XJO) is currently down 0.5%.
Let's see what the company posted.
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Bapcor share price rises as results in line with guidance
The notable highlights from Bapcor's FY24 results include:
- Revenue came to $2.04 billion, up 0.8% compared to FY23.
- Pro-forma net profit after tax (NPAT) of $94.8 million, down 24.3% year over year.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $268.4 million, down 10.1%.
- Net bank debt of $337 million with a leverage ratio of 1.7 times as of June 30, 2024.
- Declared a final dividend of 5.5 cents per share, bringing the FY24 dividend to 15 cents per share.
What else happened in FY24?
Bapcor reported a 0.8% increase in revenue, reaching just over $2 billion for FY24. Growth was hampered by its retail and New Zealand divisions.
Despite this, net profit of $94.8 million fell in line with management's guidance, which may be positive for the Bapcor share price.
FY24 was also a year of transformation for Bapcor.
While EBITDA declined by 10%, the company took several measures during the year to simplify its operations and reduce costs. These are expected to drive future savings.
Firstly, it scaled back its 'Better than Before' (BTB) transformation program, focusing on existing business segments instead.
The company also rationalised its supply chain by planning the closure of approximately 20% of its smaller warehouses, aiming to optimise inventory and reduce costs.
It also reduced its head office headcount by more than 100 non-customer-facing roles.
These measures are expected to deliver $20 million to $30 million in savings in FY25. This may be positive for the Bapcor share price – investors do love a cost-saving or two.
What did management say?
Commenting on the results, Interim CEO Mark Bernhard laid out the steps for future growth:
FY24 has been a challenging year with significant disruption to the business, through management changes and difficult trading conditions.
That said, since the trading update in May, we have taken decisive action as a management team to right-size the company's cost base and reduce operational complexity to set Bapcor back on the right path.
Bapcor's fundamentals remain strong. We have a great business in a rational and resilient industry. We have great brands and strong market share in each of our segments with competitive strength in our fulfilment model and an amazing team of industry experts.
What's next?
Looking ahead, Bapcor is focused on executing its plan under the leadership of newly appointed CEO Angus McKay, who will take the helm as of August 22.
It also announced a new CFO, George Saoud, who joined the company back in July.
The company has put high attention on cost savings for FY25, which could be impactful:
With the new team in place, the positive actions already underway and trading momentum, we are confident in the future of Bapcor and its ability to deliver an improved financial performance.
Bapcor share price snapshot
The Bapcor share price is down 23% in the past 12 months, but has climbed more than 2% in the past week of trade.
