RPM Automotive Group Ltd’s (ASX:RPM) trading results for FY21 have exceeded budget across its Tyres and Wheels, Repairs and Roadside and Performance and Accessories divisions – providing a strong platform for its growth strategy going forwards.
While market volatility is still a concern, the company has exceeded the turnover forecast with a year on year (YOY) increase of 12.15% to $9,406,998.
Additionally, the YOY gross profit increased by 13.86% to $2,949,375, the YOY operating profit increased by 119.61% to $1,453,271 and the YOY EBITDA increased by 89.96% to $1,479,136.
Tyres and wheels division
Wheels and tyres is the company’s wholesale tyre division concentrating on the supply of truck and heavy plant and equipment tyres to retailers.
This division’s incremental growth over the past year outperformed both its budget and its FY20 first-quarter performance, with turnover beating the budget by 19.58%.
The YOY operating profit increased by 34.58% and the YOY EBITDA increased by 29.35%.
Repairs and roadside division
The repairs and roadside division has continued to trade strongly, concentrating on supplying goods and services to the transport industry during COVID-19.
The division has made increases across all key performance indicators with YOY turnover increasing by 105.70%, YOY gross profit increasing by 89.66%, YOY operating profit increasing by 80.68% and YOY EBITDA increasing by 84.44%.
These results, and the expansion of the division with the acquisition of Metcher Tyres and Competition Tyres (Hallam) earlier in the year, has improved the company’s confidence in this division as the backbone of its growth strategy over the coming months.
The divisional and consolidated results achieved in quarter one FY21
Performance and accessories division
The company’s Performance and Accessories Division has also seen improved sales figures driven in part by strong demand for components in both the repairs and roadside, as well as the performance and accessories segments.
It outperformed the other divisions from a contribution percentage increase point of view with a YOY turnover increase of 11.05%, YOY gross profit increase of 58.96% and YOY EBITDA increase of 124.18%.
Along with some of the company’s retail businesses, the Motorsport Division was severely affected in FY20 by COVID-19 with stores being temporarily closed during March and April 2020.
The division has begun to bounce back with internet sales continuing and the restart of motor racing.
While both turnover and gross profit were below FY20 numbers, the EBITDA has increased by 164.26% in quarter one FY21.
These strong quarter one financial results mean the company is well placed as it prepares to take over full control of its latest acquisition, to be known as RPM Autoparts Pty Ltd, as of 1 November 2020.
Unfortunately, the company was unable to agree on terms with Elite Tyre Group with all negotiations ceasing for now.
Looking forwards into FY21, the group remains focused on the acquisitional and organic growth of its commercial tyre divisions.
Published at Fri, 23 Oct 2020 03:56:00 +0000-RPM Automotive Group focused on acquisitional and organic growth for 2021