Active Member Straws
#FY20 Guidance & update
Last edited 3 months ago

Bapcor says that the impact of COVID-19 has not been as severe as expected, and that demand has been stronger than anticipated as restrictions ease -- particularly in the Australian Retail and Trade segments.

Autobarn was quite amazing really, with sales up 45% in May & June! Although there was a 3% dip in April, FY sales from this business will be 8% higher.

Trade sales are expected to be up 5% for the FY

NZ operations, Specialist Wholesale and Thai operations were the hardest hit, but to what extend they didnt say.

Bapcor has speculated that the increase in sales was "stimulus induced". They warned investors to expect demand to moderate once Government stimulus stops.

Bapcor has reinstated guidance, telling investors to expect between $84-88m in NPAT for FY20. Prior to COVID, they were telling investors to expect mid- to single-digit gains in FY19 NPAT, which came in at $94m

Read the announcement here

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#FY20 Results
Added a month ago

Bapcor (ASX:BAP) had a decent result all things considered.

  • Revenue up 12.8%, or 7% excluding acquisitions
  • NPAT down 5.5% to $89.1m, or 30 cents per share, proforma. (added provisions, promotions and new store costs appear to account for drop in net margin)
  • Final dividend mainatin, with FY payments up 2.9% to 17.5c per share
  • Burson trade same store sales up 6%, with record sales for 70% of network
  • NZ the hardest hit due to lockdowns, sales down 5.2% and EBITDA down 14%. Sales down 80% at peak of lockdowns, but June levels ahead of where they were in February.
  • Specialist whole saw a 26% boost to revenue thanks to acquisitions, but organic growth was 5.5% at the top line. EBITDA was down 7.1%
  • Retail was surpringly strong -- I guess as we've seen elsewhere, consumers have continued to spend on discretionary items (so far) -- with a 14.7% lift in sales and 12.8% lift in EBITDA (record levels). As has been the theme for retailers, the online component grew strongly; up 240% for the year. May and June up 400% (!)
  • Retail same store sales 9.5% up for the year
  • Balance sheet in a very strong position following the capital raise. Burson has $126m in cash. Net debt is $109m
  •  5 year targets unchanged (and, if realistic, show a lot of further growth potential. See attached presentation)

On these latest figures, at at the current market price, Bapcor is on a P/E of 22.2, with a yield of 2.6% fully franked (or 3.7% grossed up)

Results presentation is here

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#Capital raise
Last edited 5 months ago

Bapcor has raised $180m through an institutional placement, issuing 40.9m new shares at $4.40.

This was done at a 8.5% discount to the most recent closing price, which isn't too bad (although it represents a ~32% discount to the pre-COVID market price).

The company is also hoping to raise a further $30m through a Share Purchase Plan (SPP) to eligible shareholders, at the same offer price (or better if the market price falls between now and the SPP close date). That will result in the issue of a further ~6.8m shares.

In total, BAP will have approximately 332m shares on issue.

The raise is primarily to reduce the comapny's net debt, and ensure there is sufficient liquidity available thorugh the COVD-19 disruption. After the raise, Bapcor expects to have at least $231m in cash, or $261m if the SPP is fully subscribed. That comapres to total borrowings of $441m.

Put another way, the net debt to EBITDA ratio wiull drop to 1.3x

At the same time, Bapcir provided a trading update which shows that business has held up remarkeably well through to the end of March, although the NZ business suffered more than others due to stricter lockdown measures. Safe to assume that April will see the full impacts of lockdowns, and it wont be pretty.

Nevertheless, the business is now well positioned to weather the storm and there is no change to its 5 year strategy.

I will lower my valuation due to the increased number of shares on issue.

ASX announcement here

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