ASX 200 stock GUD Holdings Limited (ASX: GUD) is rocketing 10.67% on Tuesday after the company released its FY23 full-year results.
The GUD share price opened at $10.60, up 3.7% on yesterday's close.
It hit an intraday peak of $11.74 — a 14.8% gain, and also a new 52-week high.
The ASX 200 stock is currently changing hands for $11.31 per share.
Let's look at the details of the report.
ASX 200 stock rockets on massive profit lift
GUD owns a portfolio of brands in the automotive aftermarket and water products sectors in Australia and New Zealand.
The automotive segment is the biggest part of the ASX 200 stock's business.
It incorporates brand names Ryco, Wesfil, and Narva.
GUD also owns the Davey brand in the water products market.
Here are the highlights of GUD's full-year results:
- Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $191.1 million, up 27% on the prior corresponding period (pcp) of FY22
- Statutory net profit after tax (NPAT) of $98.6 million, up 251.8% pcp
- Final dividend of 22 cents per share, 100% franked and payable 14 September
What else happened for GUD in FY23?
GUD said its improved earnings were driven by organic growth of 6.5% and full-year contributions from its acquisitions of APG and Vision X.
The ASX 200 stock's automotive division (excluding APG) delivered a 7.4% boost to underlying EBITA pcp.
The APG business delivered results that were in line with expectations, according to the company.
Davey achieved a 27.8% increase in underlying EBITA to $5.8 million, due to strategic initiatives and active margin management.
GUD said its corporate costs increased to $9.2 million. This reflected "a step change in external costs" such as D&O insurance and cyber/IT, as well as higher investment in business growth.
The company said the cash conversion of 113.3% predominantly reflects the unwinding of targeted net working capital (NWC) as global supply chains normalise.
Net debt was significantly reduced in FY23 to a leverage ratio (net debt/adjusted EBITDA) of 2x.
GUD says its balance sheet is in a solid position with a high proportion of fixed-rate debt.
What did GUD management say?
GUD management says:
Whilst underlying end user demand for [the automotive] businesses remains robust, ongoing labour shortages and new vehicle constraints have impacted manufacturing efficiencies and output.
Pleasingly, 'Acquired' EBITA margins rebounded in the second half, primarily reflecting an improved sales mix following a reconfiguration of the ECB manufacturing resources.
What's next for this ASX 200 stock?
GUD hopes to complete the divestment of its Davey business in September.
It is selling Davey to Waterco Limited (ASX: WAT) for a total enterprise value of $64.9 million.
This will mark GUD's departure from the water business to become a pure-play automotive company.
Investors were supportive of this decision, with the ASX 200 stock rising 3.9% on the day of the announcement last month.
GUD will provide further commentary at the annual general meeting on 26 October.
GUD share price snapshot
This ASX 200 stock is up 27% over the past 12 months and up 51% in the year to date.
