The Bapcor Ltd (ASX: BAP) share price will be on watch when trading opens on the ASX this morning after a business update was provided by the auto parts distributor in light of the coronavirus crisis.
Solid sales growth this year to date
Bapcor revealed that its overall business performance has been in line with prior expectations, and the company advised that it is so far on track to achieve its previously stated full year guidance.
The company's sales within its Burson division were noted to be continuing to grow strongly, with 5% growth achieved for same store sales from the beginning of the year until now. Gross margin percentage has also increased.
The company's retail segment has also witnessed strong recent sales growth, and the sales growth that Bapcor had witnessed in H1 FY 2020 in other divisions has also continued during the first few months of this year.
Withdrawal of FY 2020 earnings guidance
Despite this strong recent sales growth, Bapcor has made the decision to withdraw its FY 2020 earnings guidance, due to the increasingly uncertain outlook in relation to the outbreak of the coronavirus, and how this could impact various parts of its business in the months ahead.
The company noted that there have already been some business closures in its 3 core markets of Australia, New Zealand and Thailand.
Bapcor commented on the critical role that it is playing, and will continue to play in the months ahead, by providing an essential supply of replacement and service parts for cars and trucks, and also emergency vehicles throughout the crisis.
It is obviously vital that essential supplies keep moving throughout the period of this coronavirus crisis. It is not only trucks and emergency vehicles that need to be kept functioning properly – people must have adequately serviced cars during the next few months to ensure they can go to supermarkets and attend other essential services such as hospitals and medical facilities.
Darryl Abotomey, Bapcor's chief executive officer and managing director commented:
To ensure the safety of our team members and our customers, additional levels of precautions are being undertaken. However, the business is not immune from the impacts of the shut downs that are occurring and the drastic actions being undertaken to contain Covid-19.
Bapcor is a resilient and financially solid business. Our core focus is on ensuring the safety of our staff and that we continue to support and service our customers and the community through these difficult circumstances.
