The Eagers Automotive (ASX: APE) share price is sliding today after the company posted its H1 2024 results.
Eagers shares are down 3% at the time of writing and are swapping hands at $10.45 apiece as investors digest the update.
Let's see what the company posted.
Eagers share price slips despite strong sales growth
Eagers Automotive delivered a solid performance for the six months ended 30 June 2024, marked by strong sales growth. However, this wasn't enough to keep the share price afloat as other factors weighed in. Key highlights from the half-year report include:
- Revenue of $5.5 billion, up 13% year over year and a company record
- Underlying profit before tax of $182.5 million compared to $207 million the year prior
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 4.6% to $266 million
- Declared an interim dividend of 24 cents per share, in line with H1 last year
What else happened in FY24?
The Eagers share price had an interesting half of the year alongside the underlying business. Revenues of $5.5 billion were a company record and grew 13% over the year.
It reported "strong revenue contributions" from its Franchised Automotive business and its Retail Joint Venture. This "leveraged a record first half new car market".
Meanwhile, it was also a record six month EBITDA for the company, growing its pre-tax earnings by nearly 5%.
It puts this down to the "execution of [its] Next 100 strategy".
Eagers also produced a record first-half profit in its independent pre-owned business as it continues to deliver on its benchmark operating model.
New vehicle margins held steady, with the company noting that demand levels are solid compared to historical ranges.
The board also declared an interim dividend of 24 cents per share, in line with the first half of 2023. This may impact the Eagers share price.
What did management say?
Eagers Automotive's CEO, Keith Thornton, was pleased with the performance of the half despite noting the macroeconomic backdrop:
The RBA's monetary policy measures are having their desired effect in the automotive industry with reducing discretionary spending in the retail sector and a shift to more value-conscious buying. Pleasingly, overall demand has been remarkably stable, with fleets becoming increasingly active as normalised supply returns. The impact of high interest rates specifically and inflationary pressures more generally continue to weigh in on the overall result.
Despite the market challenges we have produced another resilient result with record revenue for the half supporting a record first-half EBITDA performance. This demonstrates the health of our underlying business.
What's next?
Management didn't provide any specific financial guidance. Looking ahead, Eagers forecasts continued revenue growth driven by its base business and potential acquisitions.
This will involve buying "accretive" businesses that align with its Next100 program, alongside growing the current business.
It aims to maintain "stable and profitable growth" while pursuing a "strong recovery" in its Retail Joint Venture.
CEO Thornton is optimistic about the remainder of the year:
The second half of the year will continue to present challenging conditions as the company navigates external cost pressures, OEM inventory and lower consumer confidence.
Despite this, we are well positioned for upside in key parts of our business including our Retail Joint Venture, Australia's largest pre-owned retail business easyauto123 and improving performance from acquisitions.
Eagers share price snapshot
The Eagers share price is down 26% in the last 12 months. Despite this, it has climbed slightly into the green this past month of trade.
