Automotive Aftermarket giant RPM Automotive Group Limited has released its unaudited results for the twelve months ended June 30, 2024 (FY24).
RPM generated $121 million in FY24, an increase of 3.7% on the prior corresponding period (PCP). This growth was bolstered by ongoing operational efficiencies and scale across the four divisions, resulting in an increase of 41.2% in EBITDA to $12.5 million.
Total gross profit increased to $41.4 million, up 12.0% from FY23. This was due to increased margins from optimising operations, quality procurement, and focusing on selling features and benefits. This resulted in a record Net Profit After Tax of $4.6 million, up 275% on PCP.
“During FY24, we demonstrated the resilience of our business with solid earnings performance while launching several initiatives to create new revenue streams and leverage our footprint,” RPM Automotive Group chief executive Guy Nicholls says.
“Despite economic headwinds in the retail and consumer markets, we delivered earnings growth across the business. Our wholesale segments, particularly wheels and tyres, performed well, significantly contributing to our growth.
“With our focus on higher-margin parts of the business, our underlying fundamentals have strengthened, reflecting our commitment to increasing profitability.
“We’ve invested in our people, ensuring we have the right talent and culture to drive growth. Our focus on optimising resources and leveraging our diverse product portfolio has improved operational efficiencies and increased cross-selling opportunities.
“During FY24, margin expansion was driven by strategic pricing, more effective procurement, and stock management.
“RPM is well-funded to accelerate into our next growth phase following a successful capital raise in April 2024 and eliminating our convertible note. We have strengthened our balance sheet and reduced operating costs.
“We have begun to generate strong operating cash flows, which is evidence of our renewed focus on working capital across our business. We are poised to launch our tyre recycling program, utilising our established wholesale infrastructure and customer base, advancing the circular economy and creating a new revenue stream.
“Our new SaaS product suite, developed in partnership with WHG, and our commercial agreement with Yokohama are projects that leverage economies of scale and procurement benefits to enhance margins,” he says.
Division Commentary
In FY24, Wheels and tyres (wholesale tyres) generated revenue of $43.4 million, a 29.5% increase on FY23. Growth was propelled by increased commercial tyre orders from the trucking, agricultural, and mining sectors.
The division’s integration of the Yokohama partnership is expected to drive further growth. This multi-year agreement establishes RPM as a national Yokohama wholesaler, anticipated to contribute approximately $5 million in revenue and $1 million in EBITDA in FY25.
Optimisation in inventory management, in line with the company’s strategy, has resulted in improved margins and better stock turns.
RPM’s Repairs and Roadside (retail tyres) division faced a challenging trading period, with continued pressure on the cost of living. Revenue declined 18.0% vs. PCP to $41.8 million. However, $6.4 million of the revenue decline was related to discontinued operations from FY23.
Segment EBITDA remained flat at $2.8 million, partly boosted by RPM’s optimisation and rationalisation initiatives, which targeted more profitable work. The commercial tyre segment continues pursuing new fleet clients to drive growth and extend RPM’s national footprint.
Performance and Accessories expanded its product range, distribution, and footprint, delivering $26.4 million in revenue, up 11.8% in FY23. RPM saw increased organic growth despite difficult retail conditions, bolstered by current fleet and OEM contracts.
RPM is launching a new, internally developed robotic caravan and boat mover, which is expected to drive additional sales in Q2 FY25.
Motorsport reinforced its position as Australia’s market leader in motorsport’s soft parts and safety categories, offering a broad range of brands, including RPM’s range, at various price points.
The division delivered $9.4 million in revenue, marking a 9.5% increase compared to FY23.
