The Eagers Automotive Ltd (ASX: APE) share price is blazing ahead on Wednesday after the company released its latest investor presentation. This presentation has been prepared by Eagers for its appearance at the 2021 Morgans Conference.
Investors are buying up shares in the automotive retailer following the release of this slide deck, which has given additional clarity to the company's near-term outlook.
At the time of writing, the Eagers Automotive share price is attracting $15.02 per share. This reflects an increase of 3.94% on yesterday's closing price of $14.45.
Eagers share price climbs amid presentation
Australia's oldest listed automotive retail group has gained the attention of investors on Wednesday. Heading into afternoon trade, more than 315,000 shares have exchanged hands today. This is approximately 56% of the company's average monthly trade volume.
It appears its latest investor presentation has been met with enthusiasm. So, what exactly is contained in this release that is being met with a rally in the Eagers' share price today?
Firstly, the automotive retailer highlighted its rich and successful history of operating in the Australian market. Originally founded in 1913, Eagers has reached an honourable age of 108 — with the past 64 years being publicly listed.
Since 2005, Eagers has grown its underlying profit before tax from $20 million to $209 million in 2020. This is continuing to accelerate as its first half of 2021 saw profits hit $218.6 million.
The company now boasts an extensive partner portfolio consisting of the likes of Toyota, Ford, BMW, and Porsche. In fact, Eagers considers its portfolio unrivalled, with the top 15 vehicle manufacturers by volume represented.
From the presentation, Eagers has outlined its intention to build upon its existing history by implementing a few tech-driven additions. In turn, the company is partnering with fintech companies to help it offer new innovations.
These include its plan to sell vehicles at shopping centres and airports, through what it dubs as "Automall". Additionally, Eagers will integrate online finance applications, a sales app, online services bookings, and SMS payments.
Positive outlook
Another factor bringing the Eagers share price into focus today is the macro conditions for the industry. Despite chip shortages causing some issues for vehicle manufacturers, Aussie demand for new cars has been strong. According to the Federal Chamber of Automotive Industries, new car sales increased 21% year on year to 83,312 in September. Eagers makes a point of this in its presentation, noting that demand continues to outstrip supply.
Additionally, the company expects further cost reductions driven by its investment in tech. At the same time, the company is targeting its merger and acquisition activity to deliver further revenue growth.
Finally, Eagers mentioned near-term impacts due to COVID-19. However, these issues are isolated in nature. The company's underlying performance remains resilient. The company is optimistic for its future once COVID-19 restrictions begin to be eased.
Looking in the rear view
Over the past year, the Eagers Automotive share price has outperformed the benchmark index. Specifically, the automotive retailer has gained 40.8% over the 12-month period. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up roughly half as much over the same period.
As a result, Eagers is trading on a price-to-earnings (P/E) ratio of 11 times. This is slightly under the Australian specialty retail industry average of 11.4 times.
