Bapcor shares plunge after profit warning
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More news: Shares in Bapcor have slumped more than 25% to $4.35 in early trading on the ASX after the auto parts supplier has flagged a profit hit and likely asset impairments for the second half of the fiscal year.
The company said trading conditions in its troubled retail business remained challenged due to weak consumer confidence and lower levels of discretionary spending, while the wholesale business was being impacted by competitive pricing.
Bapcor flags profit hit amid leadership turmoil
The news: Auto parts supplier Bapcor has flagged a profit hit and likely asset impairments for the second half of the fiscal year as trading conditions remain challenging for its retail business.
The numbers: Bapcor announced that it expected second-half profit to be lower than the first half, with the full-year figure now likely to be between $93 million to $97 million.
It had reported a first-half profit of $54.2 million, which itself had been 15% lower from the year ago number.
The context: Bapcor, which operates a network of 1,100 stores across the Autobarn, Autopro and Burson brands, said trading conditions in its retail business have remained challenging due to weak consumer confidence and lower levels of discretionary spending, while the wholesale business is being impacted by competitive pricing.
In addition, there have been high overheads, higher interest rates and benefits of its transformation program had not been realised. It flagged likely asset impairments in its troubled retail business and said management is actively working to reduce the cost base to be more appropriate for the current trading environment.
The weaker performance comes amid ongoing leadership turmoil. Earlier this week, former Total Tools boss Paul Dumbrell declined to take up the CEO post just days before he was due to start, which will leave interim CEO Mark Bernhard in place for now.
Chair Margie Haseltine will also not seek re-election at the 2024 annual general meeting after eight years on the board.
The source: ASX announcement
