The ARB Corporation Limited (ASX: ARB) share price is trading lower today following the release of the company's half-yearly report.
Shares in the 4WD accessory business are up 90% over the past 12 months and 23% higher year-to-date. However, the ARB share price has slipped 2.48% to $38.14 at the time of writing.
ARB share price drops despite strong performance
Sales for the half-year period ending 31 December 2020 were $284 million, an increase of 21.6% over the prior corresponding period (pcp).
ARB reported a profit after tax of $54 million for the half-year 2021, representing a 113.5% gain compared to the same period in FY20.
ARB's half-year profit before tax was $72.1 million, which is at the top of its previously released guidance. This beats the December 2019 half-year profit before tax by 109.6%.
The board declared an interim fully franked dividend of 29 cents per share. This was 18.5 cents per share fully franked last year.
The board noted that the interim dividend payout ratio of 43% was "well below ARB's historical payout ratio of between 53% and 58% over the last five years".
This is because the board plans to use excess capital to increase its future business growth.
What's ahead for the ARB share price?
With regard to its half-year performance and looking ahead, ARB said in today's release:
The company maintains a positive short-term outlook based on a strong customer order book and a return to growth in new car sales in Australia over the past few months.
The company's first half performance should not be used as an indicator for the second half of the financial year given continued uncertainty around COVID-19 related restrictions and trading conditions more generally and the inclusion of non-recurring government benefits received during the first half.
Due to uncertainty caused by the coronavirus pandemic, the company did not provide full-year guidance.
At the current ARB share price, the company has a market capitalisation of $3.13 billion.
