Peter Warren shares slide after earnings downgrade
Make us a preferred source
Make us a preferred source on Google
The news: Shares in Peter Warren Automotive have tumbled after the car dealer group flagged a drop in full-year earnings amid rising competition and slower consumer spending.
The numbers: The company said while revenue continued to grow, it now expected full-year underlying profit before tax to be in the range of $52 million to $57 million. It had reported underlying profit before tax of $81.9 million in FY23.
Shares in the company slid more than 11% to $1.90 in early trade on the ASX.
The context: The company blamed a significant increase in vehicle supply by manufacturers, which led to greater competition between dealerships and lower gross profit margins on new vehicles. Cost of living pressures have also reduced customer demand while interest costs have increased versus the prior year, it said.
The group is limiting inventory levels and associated costs by partnering with original equipment manufacturers on supply intake and increasing sales and marketing activities in some areas. It is also maximising revenue growth in service, parts and used cars.
The announcement follows a similar earnings downgrade by Eagers Automotive, the country’s biggest car dealer group, earlier this month. Eagers said cost of living pressures had weighed on consumer spending and inflationary conditions had driven up business costs.
The source: ASX announcement
