It's been a shaky, but overall positive, start to the trading week for the S&P/ASX 200 Index (ASX: XJO) and most ASX shares so far this Monday. At the time of writing, the ASX 200 has gained a decent 0.31%, despite dipping into negative territory a few times this morning. But let's talk about what's going on with the Bapcor Ltd (ASX: BAP) share price.
Bapcor shares are having a day to remember today. The automotive parts manufacturer closed at $5.27 a share last week. Bapcor may have opened lower at $5.12 a share this morning, but the company is currently up a rosy 6.74% at present to $5.62.
So what's going on today that has seen Bapcor shares rise so enthusiastically, especially on a day of very mild gains for the broader market?
Well, it looks like a trading update from the company this morning that was released before market open is responsible for this pleasing rise.
Bapcor shares spike on half-year trading update
The update that Bapcor released this morning covered the company's preliminary, unaudited performance over the six months to 31 December 2023 (1H24).
For this period, Bapcor has reported that it was able to bring in $1,018 million in revenue. That's a 2% rise over the $1,001 million that the company reported for the same period in 2022 (1H23).
In terms of pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA), Bapcor is flagging a range of $142 million and $144 million. That would be between a 1% and a 3% fall on 1H23's $146 million.
For net profits after tax (NPAT), Bapcor is expecting to book a net profit in the $53 million to $54 million range. Again, that would represent a 13% to 15% drop from 1H23's $62 million.
Bapcor blamed the falls in earnings on its retail segment (where revenues were down 3%). The company stated that its retail segment was "negatively impacted by a decline in consumer confidence which reduced discretionary spending as well as lower fitment and installation volumes in some categories such as bull bars and roof racks".
Bapcor also highlighted that higher interest rates led to financing costs rising by $7 million over the half against 1H23.
Due to these pressures, the company has committed to additional cost savings measures over the second half of the current 2024 financial year.
Bapcor CEO Noel Meehan added the following:
The first half result reflects the strength and ongoing profitable growth in our Trade and Wholesale businesses.
Having said that, the results were disappointing due to general macroeconomic headwinds which have impacted our Retail business, as well as increased cost of doing business inflation and higher interest rates.
The actions underway to improve our operational performance and the initial benefits from our transformation program are providing us with confidence going into 2H24.
Bapcor share price snapshot
Today's share price moves will be very welcome for Bapcor shareholders, who have endured some hefty losses over recent months.
Even after today's significant gains, Bapcor shares remain down by 11.9% over the past 12 months, and down more than 20% since September 2023. The company has also gone nowhere over the past five years, losing a little over 8% since January 2019.
At the current Bapcor share price, this ASX 200 stock has a market capitalisation of $1.78 billion, with a trailing dividend yield of 3.95%.
