Bapcor signals heavy commercial parts tilt


Recent acquisitions and new facility underscore ambitions

Bapcor signals heavy commercial parts tilt
Darryl Abotomey

 

Listed automotive parts and accessories firm Bapcor has lofty ambitions in the commercial vehicle sector, driven by its recent acquisitions, it indicates in a half-year performance update.

The firm marked its heavy commercial parts expansion with the purchase of Truckline and Diesel Drive in December 2019.

Bapcor’s results for the six months ended December 31, 2019 show a revenue rise of 10.4 per cent to $702.5 million, and EBITDA of $79.4 million, up 4.6 per cent.

"In the first half of FY20 Bapcor has delivered another record result, with every segment of our business growing in revenue and profit," Bapcor CEO Darryl Abotomey says, though he notes a decline in margin due to underlying economic conditions and depreciation of Australian and New Zealand currencies.

"Bapcor now has 38 branches supplying truck parts across with the light and heavy truck sectors making it one of the largest distributors in Australia.

"This sector provides another platform of growth for Bapcor and places us as the only supplier of replacement parts and accessories for all segments of on road vehicles."


How Bapcor bought Truckline and Diesel Drive, here


While the acquisitions (with a deferred settlement payment of $15 million for Don Kyatt parts in Queensland) drove up net debt up $66.8 million to $403.1 million, the expansion push is expected to improve performance in future years, "achieving in the first full year of operation (FY2021) at least a 15 per cent return on investment", the company notes.

The longer-term strategy shows a target of growing Bapcor’s light commercial locations from the current 16 to 40 and turnover from $55 million to $120 million, and growing heavy commercial from 22 locations to 50 and a turnover of $100 million to $200 million.

Abotomey speaks of the many opportunities for the "still growing business portfolio that is focused on the marker for vehicle parts, accessories, equipment, service and solutions", spotlighting the truck businesses, Asian operations, own brand expansion and distribution centre consolidation.

DISTRIBUTION CENTRE

A 50,000-square-metre warehouse in Tullamarine, Melbourne, highlights "plans for future investments in Australia and connecting to the global supply chain", the company notes.

Abotomey adds: "Our DC Evolution project is crystallising in Victoria, where we have now identified a suitable location and construction has commenced of a 50,000 square meter facility.

"The facility will utilise state of the art goods to person technology that will position Bapcor to have the most efficient warehouse operation in the industry in Australasia.

"This facility will also vastly enhance our offer to customers by having the entire range of parts from our Trade, Specialist Wholesale and Retail businesses under one roof.

"The DC is expected to become operational during 2021."

 

You can also follow our updates by joining our LinkedIn group or liking us on Facebook

 

Trucks For Hire | Forklifts For Hire | Cranes For Hire | Generators For Hire | Transportable Buildings For Hire