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Eagers Automotive’s (ASX: APE) shares shot more than 12 per cent higher today after the company delivered record first-half revenue for FY25 of $6.5 billion which was boosted by the full contributions of Victorian dealership acquisitions completed early last year.
Eagers shares closed at $25.26, up $2.71, more than doubling the company’s valuation this year to $6.5 billion, coincidentally matching its latest sales milestone.
The Brisbane-based group, which acquired Victorian dealerships associated with businessman Nick Politis for $245 million at the end of 2023, grew revenue by 18.9 per cent during the period to deliver record half-year EBITDAI of $296.7 million – up 11.6 per cent.
The company says the business benefitted from growth in new vehicle market share as well as disciplined cost management that produced a record low cost-base margin.
"Eagers' record first half revenue, including $1 billion in growth delivered in just six months, demonstrates our ability to leverage our scale, the quality of our OEM (original equipment manufacturer) brand partnerships and our unique business units to drive growth and continue to outperform relative to the industry,” says CEO Keith Thornton.
“Our EBITDAl was a record half year result. Adjusting for year-end incentives, the result was more than $30 million above the first half in 2024 and $20 million higher than the previous record.
“To achieve this at the bottom of the industry cycle is a very pleasing result, demonstrating the benefits of our multi-year business optimisation initiatives.”
During the six months to the end of June, Eagers Automotive sold about 88,000 new vehicles, up 22 per cent from a year earlier, and about 30,000 used cars, up 16.7 per cent. The group also boosted its new-car market share to 13.8 per cent from 11.1 per cent.
Eagers Automotive achieved a record first-half performance from its pre-owned business, easyauto123, with profit before tax up 33 per cent.
“Pleasingly, we combined continued market share gains in the broader new vehicle market with material gains in the new energy vehicle (NEV) market, where we now have 34 per cent market share, cementing our unique strategic position as a leading retail partner for the NEV transition,” says Thornton.
“With the strength of our property-backed balance sheet, we have a strong foundation to accelerate our business transformation and deliver on significant growth opportunities both locally and in other markets.”
The Eagers group is targeting further revenue growth for the remainder of this year above its initial full-year expectations, supported by improving market conditions.
Eagers also anticipates improved contributions from ongoing integration and optimisation of its recent acquisitions.
"In the second half of the year, we expect to continue to grow our share in an improving market and deliver further revenue growth beyond our initial expectations for the full year,” says Thornton.
“In an industry undergoing generational change, we anticipate that consolidation, rationalisation and evolution will continue at pace.
“Into this dynamic, we expect Eagers to emerge as a net winner by focusing on growth initiatives that enable our strategy and respond to the challenges and opportunities of the changing market.”
The company is paying an interim dividend of 24c per share.
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