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Australia's Bapcor still finding NZ a happy hunting ground

Wednesday 13th February 2019

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Australia's Bapcor is still enjoying strong earnings growth from its New Zealand autoparts business and opened another two stores as it chases market share. 

The local arm of the autoparts supplier lifted earnings before interest, tax, depreciation and amortisation 21 percent to A$12 million on a 4.9 percent gain in revenue to A$86.3 million in the six months ended Dec. 31. 

Victoria-based Bapcor established a beachhead in New Zealand when it bought Hellaby in 2016 for $352 million, acquiring a portfolio of assets including the autoparts business BNT, a footwear retail chain, and a resource services firm. It's since sold the footwear and resource services firms, and more recently quit the TRS agricultural tyre and wheel business. 

Last year, Bapcor signalled plans to expand its footprint in New Zealand, which spans 79 locations. That includes an extra two BNT stores, which is Bapcor's biggest Kiwi division with 58 sites. 

Managing director Darryl Abotomey said the New Zealand business was still performing solidly. He characterised the 33 percent increase in annual earnings for the June 2018 year as a very strong performance. 

Bapcor bought Hellaby primarily for the autoparts businesses at a time when New Zealand's strong currency, expanding population, investment in new roads, and cheap oil prices underpinned record registrations for new vehicles.

Motor Industry Association figures showed new registrations eased in January, while still at relatively high levels. Meanwhile, government data out yesterday showed vehicle-related spending on credit and debit cards, excluding fuel, was up a seasonally adjusted 0.6 percent in January. Actual spending rose 4.4 percent to $178 million in January from a year earlier. 

Group profit rose 13 percent to A$45.5 million in the half on a 3.2 percent increase in revenue to A$636.1 million.

The board declared an interim dividend of 7.5 Australian cents per share, up from 7 cents a year earlier. 

Bapcor forecasts annual underlying profit to rise 9 percent, the bottom end of previous guidance. 

The ASX-listed shares sank 9.8 percent to A$5.79, unwinding most of this year's gain. 


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