Guess which ASX 200 stock is surging 13% after solid half-year result

This stock is charging higher after investors responded positively to its results release.

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ARB Corporation Ltd (ASX: ARB) shares are having a stunning session.

In morning trade, the ASX 200 stock has jumped 13% to a 52-week high of $40.43.

This follows the release of the 4×4 automotive parts company's half-year results.

ASX 200 stock jumps on results

  • Sales revenue up 0.1% to $341.5 million
  • Profit after tax up 8.1% to $51.3 million
  • Interim dividend up 6.3% to 34 cents per share

What happened during the half?

For the six months ended 31 December, ARB reported a modest 0.2% lift in sales revenue to $342.7 million.

The ASX 200 stock's sales would have been stronger, but its Aftermarket sales were significantly hindered during the second quarter by industrial disputes across Australian ports. This resulted in extensive inbound and outbound disruptions. Australian Aftermarket were up 3.7% over the prior corresponding period.

Management advised that it continues to implement initiatives to improve its fitting capacity and alleviate constraints.

ARB's Export sales fell by 13.6% during the period after strong sales growth in the UK was offset by challenging market dynamics in other key international markets.

Finally, sales to original equipment manufacturers (OEM) increased by 53.8% over the period. This is attributable to increased volume from existing contracts, new vehicle model launches, and vehicle availability.

The ASX 200 stock's profits grew quicker than its sales thanks to margin improvements. ARB reported an 8.1% increase in profit after tax to $51.3 million. This allowed the company's board to increase its dividend by 6.3% to 34 cents per share.


The good news is that the second half has started very positively. Management revealed that sales in the month of January were strong with the resolution of Australian port disruptions and management initiatives contributing positively to accessory fitting capacity.

In addition, it advised that it maintains a positive outlook despite continued uncertain economic conditions, particularly in the global environment. It concludes:

The company has a strong customer order book, strengthening partnerships and opportunities with OEMs and new and innovative products to be released to market during 2024. The Company's distribution network continues to expand to meet higher customer demand as the supply of new vehicles around the world increases. The Board believes ARB is well positioned to achieve on-going long-term success in Australia and internationally, with strong brands around the world, loyal customers, very capable senior management and staff, a strong balance sheet and growth strategies in place.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation. The Motley Fool Australia has recommended ARB Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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