Truckline and Diesel Drive seen as valuable contributors to bottom line
Bapcor, parent of automotive accessories giants Autobarn and Burson, reserves special praise for its truck-part expansion in its full-year report.
Revenue from all its operations amounted to $1.46 billion, up 12.8 per cent year-on-year, with earnings before interest, taxes, depreciation and amortisation (EBITDA) down 4.1 per cent to $157.8 million and net profit after tax (NPAT) down 5.5 per cent to $89.1 million.
The record revenue was “driven by record revenue and earnings in our Burson Trade and Retail businesses and the addition of the Truckline business in December 2019”, the company says.
The Specialist Wholesale (SWG) segment, which contains Bapcor’s truck parts business, continued to expand during FY20 with the addition of Truckline and Diesel Drive.
SWG revenue increased 26 per cent and EBITDA grew 8.7 per cent compared to FY19.
Excluding the acquisitions, revenue grew 5.5 per cent and EBITDA declined 7.1 per cent, “reflecting the impact of the difficult trading conditions, particularly with customers reducing inventory levels during Covid-19”.
The acquisition of Truckline “has exceeded expectations in its first seven months of being part of the Bapcor group”, contributing revenue of $57.4 million and NPAT of $1.9 million.
Diesel Drive contributed $7.3 million revenue and $924,000 NPAT.
“FY20 has been a challenging year for Bapcor, as it has been for most businesses,” Bapcor CEO Darryl Abotomey says.
“The ongoing impact of the drought and the bushfires in Australia combined with the unexpected and unforeseen global COVID-19 pandemic created the most unusual combination of circumstances our businesses have ever faced.
“The government enforced restrictions particularly in New Zealand and also Australia and Thailand constrained the business performance.
“However despite the circumstances Bapcor’s talented team members have been able to deliver a commendable result for FY20.”
Our feature on Bapcor’s parts warehousing expansion, here
Due to its trading performance, in Australia, Bapcor did not receive any government support, such as JobKeeper, other than a Queensland payroll tax reimbursement.
In New Zealand, Bapcor received $3.9 million in government support, “which was all paid to team members who otherwise would have been stood down”.
“Although expansion was constrained by the Covid-19 restrictions, the group added 45 new company locations throughout our network which was fabulous work from our team members.
“Our business now has over 1,000 locations throughout Australia, New Zealand and Thailand.
“Bapcor continues to invest for the long term benefit of the business, including having announced the new distribution warehouse facility at Tullamarine in Victoria.
“This will be a state of the art facility that will deliver efficiency improvements and inventory reductions.
“Other projects over the past year have included an upgrade to the computer infrastructure, implementation of a new warehouse management system, a new retail point of sale and there are further developments underway in our ecommerce and digital platforms.”
While it says market fundamentals and opportunities will continue to drive profit growth in the future, given the current economic uncertainties and unknown future impacts of Covid-19, the company is not in a position to provide a forecast of earnings in the short term.