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AP Eagers Ltd drives home 13% profit growth

Credit: NRMA Motoring and Services

Leading automotive dealership AP Eagers Ltd (ASX: APE) has reported another strong full year result.

For the 12 months ending December 31 the company, which has seen its market capitalisation increase to over $2 billion in the past year, reported growth in all key metrics.

Here are some of the highlights:

  • New vehicle sales increased 13.9% to 51,231
  • Used vehicle sales increased 3.7% to 26,399
  • Earnings before interest, tax, depreciation and amortisation (EBITA) excluding impairment increased by 18% to $163 million
  • Underlying profit before tax increased by 19% to $126.4 million
  • Net profit after tax increased 13% to $87 million
  • A fully franked final dividend of 20 cents per share (cps) was declared, bringing total dividends for the full year to a record 32 cps

AP Eagers’ balance sheet is in good shape with low gearing and the group holding a 19.9% strategic investment in peer Automotive Group Holdings Ltd (ASX: AHG) valued at approximately $275 million. It also has $250 million in prime real estate on the books.

While automotive manufacturing in Australia is a troubled story, many ASX-listed companies which are exposed to other areas of the automotive sector have been enjoying success.

Shares in spare parts wholesale and retail operators Burson Group Ltd (ASX: BAP) and Super Retail Group Ltd (ASX: SUL) are up 80% and 4% respectively over the past year, while four-wheel drive parts specialist ARB Corporation Limited’s (ASX: ARB) share price has gained 22%.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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