The Bapcor Ltd (ASX: BAP) share price fell around 5% after the auto parts company announced its FY21 result.
Bapcor is the auto parts business which runs several brands including Burson, Autobarn, Midas, ABS and Truckline.
Bapcor’s FY21 result
It reported that revenue increased by 20.4% to $1.76 billion.
Breaking that down, trade revenue grew 15.5% to $649 million, New Zealand revenue increased 8.8% to $170 million, specialist wholesale revenue rose 26.8% to $660 million and retail revenue went up 26.1% to $369 million.
Bapcor’s pro forma EBITDA (EBITDA explained) increased 28.8% to $279.5 million. Pro forma means the company’s calculation to show the a true representation of underlying performance. Trade EBITDA grew 19% to $115 million, whilst specialist wholesale EBITDA rose 42.2% to $90 million.
Net profit after tax grew by 50% to $118.8 million. Profit/earnings per share (EPS) went up 26.8% to 38.3 cents.
However, Asian growth has come to a standstill. The Burson Thailand business is being heavily impacted by the pandemic. It has six locations in the Bangkok district, with the seventh ready to open. But expansion is being put on hold until COVID-19 impacts subside. A range of cost control measures are being implemented in response to COVID-19.
Dividend growth
The Bapcor board decided on a final dividend of 11 cents per share, this meant the full year dividend was 20 cents per share – an increase of 14.3%.
Current trading conditions
July was impacted by COVID lockdowns in most Australian states, though the fundamentals of the vehicle aftermarket remain strong with an increase of demand for second hand cars, a preference away from public transport and more people spending their holidays domestically using their vehicles.
However, Australian and New Zealand lockdowns will impact earnings. In FY22, Bapcor aims to deliver pro forma earnings at least to the level of FY21. But this is dependent on how long lockdowns go on for.
Longer-term outlook for Bapcor and the share price
Things are looking positive for Bapcor over the next three to five years. It has large growth plans for Asia. Bapcor is also looking to keep growing its own domestic store network, which will grow earnings.
A higher proportion of private brand products and an improved supply chain should also increase margins.
I think that Bapcor is one of the more solid ideas as one of the ASX dividend shares and ASX growth shares to think about. I’m just not sure how electric vehicles plays into Bapcor’s long-term future, and how this will impact long-term profit. But that is probably a long way away.
