ARB Corporation Limited (ASX:ARB) Is On A Roll

Companies and indices mentioned:

ARB Corporation Limited (ASX: ARB) today released their half-year results to 31 December 2018, with profit before tax up 5.1% to $37.5 million.

ARB Corporation started in 1975 when founder Anthony Ronald Brown began making products out of his family garage. The products were well engineered and durable, perfect for the extreme conditions experienced in the outback. Today ARB Corporation is the largest manufacturer and distributor of 4×4 accessories in Australia.

Key results

ARB Corporation reported:

  • Revenue up 5.5% to $219 million
  • Profit before tax up 5% to $37.5 million
  • Net profit after tax (NPAT) up 14% to $27 million
  • EPS up 16% to 34.4 cents
  • An interim dividend of 18.5 cents per share fully franked

Management cautioned against looking at the 14% increase in NPAT. They cited a $3 million expense for under-provision of taxes in the prior year as making this year’s percentage increase look impressive. Management recommended adding the expense to the prior year for comparative purposes and in doing so the increase in NPAT is 3%, instead of 14%.


ARB Corporation has three key segments for its sales with:

  • Sales to the Australian Aftermarket up 3.2% for the year, comprising 64.7% of the group’s revenue
  • Sales to the Exports market up 7.3% for the year, comprising 27.1% of the group’s revenue
  • Sales to Original Equipment Manufacturers up 21.5% for the year, comprising 8.1% of the group’s revenue.

Distribution Channels

In the Australian aftermarket the company distributes through:

  • its ARB store network to retail customers
  • ARB stockists
  • new vehicle dealers
  • various fleet operators

The group added an extra 4 ARB stores from last year bringing the total to 65 and expects to add a further 3 before the end of the financial year.

ARB has also commenced building a 20,000 sqm global warehousing facility in Thailand. It is expected to help increase the efficiency of the global distribution network by directly supplying a broader range of products at a lower cost from a more central location.

Rask Perspective

There is no doubt that ARB Corporation is a great company with competent and able management. The only reason ARB shares are not in my portfolio is valuation – it’s too high for me at current prices.

3 stocks to own in July 2020...

Amidst the COVID-19 confusion, there are some companies still growing FAST (think: online meetings through Zoom, streaming companies like Netflix and eHealth services provided by Teledoc).

While the world grapples with COVID-19, some companies are still growing rapidly. The entire cloud computing market is valued around $US210 billion but if you ask me, it seems clear as day that this market is only going to get bigger in 2020 and beyond.

That's why our top investment analyst has just identified 3 growth stocks in a net cash position, with strong competitive forces... and obvious tailwinds at their back. He owns all three of them right now!

Claim a FREE investing report on our analyst's "3 best share ideas for the cloud revolution" when you create a free Rask Australia account.

Our report is 100% free and unlocks hundreds of hours of bonus content.

Simply click here to access the report.

Disclaimer and warning: This information is published by The Rask Group Pty Ltd and contains general financial advice and information. That means, the information/advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms of Service and Financial Services Guide before using this website.

Andrew Schonberger

Andrew Schonberger

Andrew is a qualified Chartered Accountant (CA) with a strong passion for finance and investing.