Eagers shares tumble after flagging lower first-half earnings
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The news: Shares in Eagers Automotive have tumbled after the car dealer group flagged a drop in first half profit amid slower consumer spending and rising costs.
The numbers: Eagers CEO Keith Thornton told shareholders at its annual general meeting that the company's underlying trading performance in the first half will be around 85% of the underlying profit before tax for the first half of 2023. It comes despite revenue rising 18.3% in the four months to April and the company reaffirming $11 billion in total revenue for 2024.
Eagers shares were down 17.8% to $10.02 in early trading on the ASX.
The context: The country’s biggest car dealer group said cost of living pressures had weighed on consumer spending and inflationary conditions had driven up business costs.
It was also seeing increased competition in the marketplace as more free supply returned. Eagers outlined the New Zealand market as well as the Sydney and Newcastle markets as being particularly soft compared to last year.
What they said: Eagers CEO Keith Thronton said: "We remain disciplined in our focus across our operations and optimistic regarding the outlook for the remainder of 2024 despite macro headwinds".
"The new car market remains on track for another record year as our order bank continues to be delivered supporting both revenue and margins, while the underlying order write remains solid," he said.
The source: ASX announcement
