Bapcor’s revenue revs up as demand for used cars soars

Aftermarket auto parts provider Bapcor has been a beneficiary of the COVID-19 pandemic as used car demand soars.

Bapcor owns and operates retail brands including Midas and Autobarn, as well as Burson.

Shares in listed aftermarket auto parts provider Bapcor have revved up to record highs after a surge in demand for used cars led to the group dodging lockdowns in Melbourne and New Zealand.

The company’s shares accelerated 3.15 per cent to hit $7.85 after it said in its latest earnings update that it had so far defied the worst effects of COVID-19 restrictions.

In the four months to September 30, group revenue soared 27 per cent — based on unaudited accounts — with its retail and specialist wholesale division leading the way, posting respective revenue rises of 47 and 45 per cent.

Meanwhile, revenue at its Burson Trade business rose 10 per cent, with same stores up 7.7 per cent. If Victoria is excluded, same store sales surged 17 per cent compared with the previous corresponding period. Revenue across its New Zealand business firmed 6 per cent.

Chief executive Darryl Abotomey said he is expecting the rubber to just hit the road in regard to demand, given international travel bans will lead to more people taking road trips to the regions.

“We are very pleased with the start to the 2021 financial year, despite the impact of the government imposed restrictions,” he said.

“Recent trading is another example of its resilience assisted by the increase in sales of second hand cars, reduction in use of public and shared transport modes as well as government stimulus.

“We envisage that the impacts of COVID-19, including the expected increase in domestic tourism and increased use of vehicles will continue to drive the Bapcor businesses.”

Used car prices have hit a record high as the supply of new cars slows from factory shutdowns to limit the spread of coronavirus and dealers desperately search for inventory to fill their yards. It’s a trend that industry insiders expect not to dissipate soon.

Australians have shunned ­public transport, with usage diving 60 per cent since January, and also avoiding taxis and ride sharing services.

While demand for cars has soared during the pandemic and fuelled an earnings spike at Bapcor — which owns and operates retail brands including Midas and Autobarn, as well as Burson — Mr Abotomey stopped short of giving an exact earnings forecast for the group.

“Overall Bapcor expects to deliver a strong first half, however the second half remains unclear, and given the current economic uncertainties and any potential government restrictions, is not in a position to provide a forecast of earnings for the current year.”

Its strong start to the financial year comes as the group added 45 locations in the past 12 months. It now has 1000 stores across Australia, New Zealand and Thailand.