Closed down 24%. My chart-ware not working for Bapcor.
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‘Consumers pulling back’: Autobarn owner Bapcor in $500m wipeout
Simon EvansSenior reporter
May 2, 2024 – 11.57am
Bapcor’s shares plunged as much as 35 per cent after the company
handed down another hefty profit downgrade and flagged write-downs. More than $500 million in market value was wiped from Bapcor when a two-day trading halt was lifted on Thursday, concluding an extraordinary turn of events
where CEO-elect Paul Dumbrell pulled the pin on the top job two days before he was due to start on May 1.
Bapcor, which had already downgraded profits twice in the past eight months, warned that soft conditions in its retail operations would drag net profit sharply lower in the June half. Bapcor, which runs 1100 stores across the Autobarn, Autopro and Burson brands, said net profit for the full year would be $93 million to $97 million, having booked $54.2 in the first-half.
The shares tumbled to a low of $3.76, before recovering partially, down 24.5 per cent to $4.36.
Interim CEO Mark Bernhard said consumers were cutting back on spending and he had instituted a cost-cutting program group-wide. “Trading conditions since our last update to the market have remained challenging as consumers continue to pull back on spending, primarily impacting our retail business,” Mr Bernhard said.
million in the first-half.
Citi analyst Sam Teeger said the cut in profit forecasts represented a downgrade of 18 per cent from market consensus at the mid-point. “The magnitude of this downgrade is disappointing not only because it shortly follows two recent downgrades in January 2024 and October 2023 but also as there was an expectation that this category should be relatively non-discretionary,” he said.
Citi is “concerned” about the direction of the company and its ability to recruit a capable CEO. Mr Teeger also said there was a risk of further management departures.
Mr Dumbrell stunned the board on Monday by making a last-minute decision to pull out of the chief executive role with two days’ notice. Bapcor has had four CEOs in the past two years.
Mr Bernhard, a director of Bapcor since 2022, was put into the interim CEO role in early February when Noel Meehan left for personal reasons after two years.
Impairments to be confirmed
Mr Meehan, a former chief financial officer of Penfolds owner Treasury Wine Estates, took the helm in February 2022
following internal upheaval over the ousting of long-serving CEO Darryl Abotomey, who had run the company for 10 years.
Mr Abotomey on Wednesday blamed the board and chairwoman Margie Haseltine for the downturn in the company’s fortunes. Ms Haseltine said in a statement on Tuesday it was “disappointing” that Mr Dumbrell had a change of heart.
Mr Bernhard, a former managing director of General Motors Holden’s operations in Australia, said on Thursday there may be impairments in the carrying value of Bapcor’s retail business, but that will be confirmed at the full-year results.
Fierce competition in the wholesale business was hurting pricing, resulting in “volume and margin compression”. He also noted that May and June were traditionally the strongest months for the group in its trade unit and the New Zealand operations.
Mr Dumbrell is a former V8 Supercars racing driver with a strong pedigree in retail, running the Total Tools business for Metcash for five years before agreeing in February to rejoin Bapcor.
Mr Dumbrell worked as a senior executive at Bapcor for three years in the wholesaling division from 2015, before being lured to Total Tools. In 2012, he won the prestigious Bathurst 1000 car race as a co-driver with motor racing champion Jamie Whincup.
It was a sharemarket favourite with investors during the pandemic when sales jumped as people spent up on car parts and accessories.
Not Holding
Kind regards
rcw1