Autobarn owner Bapcor’s profit soars 54 per cent as demand goes through the roof

Demand for roof racks going through the roof, as more Aussies take road trips in the pandemic, fuels profit boost for the owner of Autobarn and Autopro.

Bapcor chief executive Darryl Abotomey is seeing strong demand ahead.

Auto aftermarket giant Bapcor’s boss Darryl Abotomey can’t get his head around it, but the demand for roof racks grew 60 per cent in the first half to the end of December.

“I just don’t get it. From my perspective, you put a roof rack on your car it stays for life, but our demand has been going through the roof,” he told The Australian.

“We are still struggling to keep up with demand. It has been our biggest seller, up 60 per cent on the same period last year.”

The near-$3bn market cap business reported a 54 per cent jump in profit to $70.2m while revenue soared nearly 26 per cent to $883.6m.

The owner of about 1100 retail outlets across its Autobarn, Autopro, Burson and Sprint brands, declared a 9c per share dividend, up from 8c in the previous corresponding period.

“As more people spent more time in cars, we have seen demand grow across our group.

“This is people looking for creature comforts, buying mobile entertainment, including radios and other accessories for dashboards or even upgrading newly bought second-hand cars, possibly as a second car for someone in the household that previously used public transport.

“Demand on the trade side – a sizeable part of our business – has also been strong with servicing of cars picking up strongly, possibly for those long road trips.

“In terms of the outlook, it looks like we’ll be busy with the 300,000 odd Australians, including my son from London, returning home permanently, now needing cars and subsequently, our products and services.”

The company told investors trends established during COVID-19, including increased second-hand vehicle sales, social distancing with a move away from public transport and more on-road holidays, underpinned the profit boost and were expected to continue to push demand.

The record result reflected the resilience of the business, Mr Abotomey told investors.

“The fundamentals of the vehicle aftermarket continue to remain strong.”

The move away from public transport in a growing socially distanced community was also resulting in more cars on the roads, boosting company profits further.

“There are (also) significant opportunities within Bapcor to drive growth including further network growth, procurement and supply chain efficiencies as well as own brand (white label volume) growth.”

The business did not provide its own profit guidance but said market consensus for its pro-forma full year net profit after tax is currently circa $122m, “which prima facie does not appear unreasonable, albeit economic uncertainties could impact future earnings”.

Within the business, the retail division, led by the 133-strong Autobarn storechain, delivered a 56 per cent earnings increase.

Net debt at the end of December was $120.4m and no government subsidies, including any JobKeeper payments, were received during the period.

The half also saw significant progress being made in investments to drive the long-term success of Bapcor, including the new distribution warehouse building at Tullamarine in Victoria, which is nearing practical completion.

In January 2021, business performance has continued at similar levels to the first six months of the year.

Shares in Bapcor were trading lower at $7.99 in noon trading.