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Results: ARB share price rises after 12% profit growth

The ARB Corporation Limited (ASX: ARB) share price is on the rise today after the company reported its FY19 results this morning. The ARB share price opened at $17.36 this morning, but has risen 2.60% at the time of writing to $17.74.

What do ARB’s numbers look like?

ARB has delivered a set of numbers that are broadly positive across the board.

  • Revenue came in at $446.57 million – up from $425.14 million for FY18 (a rise of 5%)
  • Profit after tax at $57.14 million – up from $50.97 million for FY18 (a rise of 12.1%)
  • Earnings per share of 71.9 cents – up from 64.3 cents in FY18 (a rise of 11.82%)
  • Dividends per share of 39.5 cents – up from 37 cents in FY18 (a rise of 6.8%). ARB’s final dividend of 21 cents per share (fully-franked) will be paid on 18 October.
  • Cash flow from operations increased by 11.6% to $50 million.
  • ARB has also reported compound annual growth rates over the last ten years for revenue at 8.8% and profit after tax at 9.7%

ARB’s revenue for FY19 is broken down into Australian aftermarket at 62.9%, exports at 29.4% and original equipment at 7.7%, with exports continuing to be the focus area for ARB. The company reported sales growth in the United States (US), Czech Republic and Thailand, with UAE sales experiencing a decline. ARB noted that this sales growth was assisted by a weaker Australia dollar.

Outlook for ARB

ARB noted a few headwinds for earnings over FY19, the most pertinent being new car sales falling significantly in Australia. Although the falling Australian dollar has assisted sales, ARB noted that the AUD/Thai Bart exchange rate has had significantly negative impact on the cost of manufacturing ARB products and “will continue to affect the Company’s performance throughout the first half of the new financial year.”

Here’s some of what ARB Chairman Roger Brown had to say on the outlook for ARB for FY20:

The current economic conditions remain uncertain. However, the Board remains focussed on the long-term growth of the Company as it develops and pursues a number of exciting opportunities. This includes further growth in export markets, new products and vehicle releases, and improved distribution. With strong brands around the world, capable senior management and staff, a strong balance sheet and growth strategies in place, the Board believes ARB is well positioned to achieve long term success.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB Limited. 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 Scott Phillips.

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