Bapcor Ltd (ASX: BAP) has unveiled strong growth numbers for the first half of FY21. However, the Bapcor share price has skidded lower by around 2% at the time of writing.
Bapcor operates Australia’s largest auto parts and accessories business in Australia and New Zealand. Amongst Bapcor’s umbrella of various businesses, perhaps two of the better known ones would be Burson Auto Parts and Autobarn.
Bapcor zooms ahead
The auto parts business delivered a record first-half result on a revenue and earnings basis.
For the first half of FY21, revenue climbed 25.8% compared to the prior comparable period (pcp) to $883.6 million. Growth was fuelled through the addition of 27 new company locations across Bapcor’s network. At the end of the half, Bapcor had 1,100 locations across Australia, New Zealand and Thailand.
EBITDA and net profit after tax (NPAT) lifted at an even faster rate, demonstrating operating leverage within the business.
Bapcor recorded EBITDA growth of 36.5% and NPAT growth of 54% to $145.6 million and $70.2 million, respectively.
Management in-part credited the result to a reduction in discretionary expenditure on items such as travel, marketing and promotions.
Income-hungry shareholders will be pleased to see that the interim dividend was bumped up 12.5% to 9 cents per share, fully franked. Based on the current share price on $7.90, this means Bapcor shares trade on a trailing dividend yield of 2.3%.
Management commentary
Commenting on the result, CEO and Managing Director Darryl Abotomey said: “Bapcor’s talented team members have delivered another outstanding record result in the first half of FY21. Every one of our business segments increased revenue and earnings, capitalising on the increased demand during the period.”
Darryl also highlighted initiatives the group is implementing to support ongoing growth, including:
- A new distribution warehouse in Tullamarine in Victoria, which is nearing completion; and
- A new point of sale system at Autobarn (implemented during the half) and a new e-commerce platform to be launched in the next two months.
My take
In my view, Bapcor has not let investors down with its first-half result, and momentum should continue for the remainder of FY21. Looking forward, I can envision Bapcor growing both domestically and overseas.
That said, if growth is what you’re after, I think there could be more exciting opportunities elsewhere on the market, such as Volpara Health
Technologies Ltd (ASX: VHT).
