The Eagers Automotive Ltd (ASX: APE) share price is climbing in early morning trade following the release of a trading update. At the time of writing, the automotive retailer's shares are swapping hands for $15.57, up 2.57%. In comparison, the S&P/ASX 200 Index (ASX:XJO) is flat at 7,055 points.
How did Eagers Automotive perform for the period?
Eagers Automotive shares are within sights of breaking new territory after the company delivered a strong result.
For the quarter ending 31 March 2021, Eagers Automotive expects to report an underlying operating profit before tax of around $98 million. On a statutory basis, the group anticipates net profit before tax from its operations to come at $105 million.
Management stated that the sound result is being driven by unusually strong market tailwinds. Demand is outstripping supply, and the company's material cost-out program, completed within the last year, is also seeing ongoing benefits.
Eagers Automotive reiterated that it remains attentive on balancing the risk of changing market dynamics aligned with its growth plans. The company's Next 100 strategy with managing its cost base efficiently is continuing to advance.
Furthermore, Eagers Automotive revealed that the robust result does not include the sale of the Daimler Truck operations and Milperra property. The transaction, valued at $108 million, is slated for completion sometime in the first-half of 2021.
Once the divestment is transferred to Velocity Vehicle Group, Eagers Automotive believes this will simplify its automotive retail businesses. An estimated net gain of before tax between $32 million and $36 million is estimated to be delivered.
Eagers Automotive share price snapshot
Over the past 12 months, the Eagers Automotive share price has gained more than 280%, with year-to-date up around 14%. The company's shares reached an all-time high of $15.89 on Wednesday and could break that feat again.
Based on the current share price, Eagers Automotive commands a market capitalisation of roughly $3.9 billion. In addition, the company has close to 257 million shares on issue.
