Half Year 2024 Eagers Automotive Ltd Earnings Call Transcript
Key Points
- Eagers Automotive Ltd (ASX:APE) reported a 13.4% increase in total revenue for the first half of 2024, reaching a record $5.5 billion.
- The company achieved an underlying net profit before tax of $182.5 million, with a return on sales margin of 3.3%.
- Eagers Automotive Ltd (ASX:APE) has fortified its balance sheet with approximately $800 million in undrawn debt facilities, providing a platform for future growth opportunities.
- The company announced an interim dividend of $0.24 per share, maintaining the interim dividend set in the first half of 2023.
- The easyauto123 business is performing exceptionally well, poised for a record full-year 2024, and acts as a hedge against new car market headwinds.
- The underlying return on sales measure decreased to 3.3%, down from 3.6% in the previous period.
- The company faces continued pressure on new car margins due to excess inventory and a more cautious consumer market.
- Finance penetration across the industry has not recovered as quickly as expected, impacting overall profitability.
- The acquisitions made in the last three years are running at a lower return on sales (1.9%) compared to the core franchise automotive business (4.1%).
- The company is not immune to interest rate and general inflationary pressures, which have impacted its cost base.
Thank you for joining us today to discuss the Eagers Automotive results for the half year ending June 30, 2024. For Sophie Moore, our CFO, joins me this morning and together we have the privilege of presenting the results for the first half. Our results pack, including the slides for the presentation, has been lodged with the ASX and should be visible via the webcast.
As outlined on slide 2, the presentation today will provide our financial results, followed by operational and strategic updates. We'll also provide the company's outlook for the remainder of 2024 and beyond before opening for questions. So let's begin with the financial results for the first half of 2024.
At the start of 2023 and again, for 2024, we set out our simple ambition for the company, which was twofold: to drive material top line revenue growth while also continuing to optimize the underlying business to build a platform for strong, sustainable returns over the long term. Our results today demonstrate continued progress on these fronts.
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