Amotiv shares rise on mixed Q1 update, share buyback
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The news: Amotiv shares lifted in morning trade on the ASX after the car equipment company provided a first-quarter trading update that met market expectations, and unveiled a 12-month share buyback.
The numbers: Amotiv was the second best performing ASX 200 company by 11:45am AEDT, climbing 5.5% to 55 cents per share.
In a trading update, Amotiv said first-quarter conditions remained "mixed", reflected in Q1 revenue growth of around 3.5% compared to the prior corresponding period. The result was marginally lower than consensus estimates of 4%, according to Visible Alpha data.
Amotiv also announced its intention to commence an on-market buyback of 5% of its share capital.
The context: Amotiv — which manufactures, imports, distributes, and sells automotive products — noted that its 'wear and repair' segment continues to be resilient. However, the New Zealand market and the company's caravans and RVs segment remained soft.
While destocking by Australian resellers persisted in the first quarter, reseller sales levels indicated that end user demand remains steady, the company said, while US growth was strong.
Citi analysts said the update was in-line with expectations and the share buyback "should be taken positively". However, they cautioned that it remained unclear whether EBITA growth was possible for the first half of the 2025 financial year, particularly in light of inflationary pressures.
Citi consequently expects first-half EBITA to decline by 2.3% compared to Visible Alpha consensus of 1.8% growth.
Meanwhile, Amotiv said the share buyback represents "the best use of that capital and strikes the right balance of delivering sustainable returns to shareholders without compromising the company's strong capital position or its ability to continue investing in growth".
The sources: ASX announcement, Citi research
