RPM Automotive Group has reported increased revenue and earnings for H1 FY24 in spite of challenging trading conditions.
In a trading update for the six months ending December 31, 2023, Victoria-based RPM increased its guidance for FY24, saying revenue is up 4% to $29 million in Q2 FY24 on the prior corresponding period (PCP), gross margin is up 280 basis points (BPS) to 34.4% (H1 FY23: 31.6%) driven by ongoing benefits from scale, operational optimisation, and disciplined procurement management; and earnings growth is $5.9 million – up 37.2% PCP (H1 FY23 – $4.3 million).
RPM’s wholesale tyre division has been strengthened with the acquisition of Chapel Corner Tyres, restructuring cost benefits were $1.5 million in annualised cost savings achieved, and revenue is expected to exceed $130 million and EBITDA guidance range increased to $11-$13 million (prior $10.5-$12 million), adding the second half (H2) is typically stronger.
“Over the half, we continued our focus on optimising RPM for its next phase of growth,” says chief executive Clive Finkelstein.
“We strive for operational excellence and efficiency across the business, and I believe we are now well placed to drive further growth and margin expansion.
“In the first half of FY24, gross profit margin increased to 34.4%, up 280 BPS on PCP, and we expect to deliver a similar margin for the full year, benefitting from scale, cross-selling opportunities and further diversification of our product range,” he says.
“Our wholesale tyre division is actively expanding its geographic reach across Australia, particularly in Victoria through the successful integration of Chapel Corner Tyres.
“Further, it is pleasing to see growth across our performance and accessories division over the half, as new partnerships and initiatives strengthen our market presence and enrich our product offerings.
“Revenue for the first half of the FY24 was $57.4 million, up 3.1% on the same period last year, reflecting RPM’s success is growing sales in spite of ongoing challenges, with difficult trading conditions impacting the broader market and retail in general.”
RPM intends to release its audited financial results for the six months ended December 31, 2023, on Monday February 26, 2024.
Finkelstein, chief financial officer Rebecca Payne and chief operating officer Guy Nicholls will host an investor webinar followed by a Q&A session at 10.30am (AEDT) on the day – click here to register.
