RPM Automotive Group Ltd achieves record half year with revenue up 73% as growth momentum accelerates
“Our complementary businesses and brands, along with successful cross-selling and services, have supported RPM Automotive Group’s strong growth across all financial metrics, even under challenging operating conditions given the impacts of COVID-19” , says MD.
RPM Automotive Group Ltd (ASX: RPM) achieved a record six months ended December 31, 2021, generating revenue of $34.4 million, up 73% from the prior corresponding period.
The company saw an increase in demand for commercial and wholesale passenger tires, rebounds in repairs and roadside, and performance and accessories once business conditions eased.
During the period, RPM continued to deploy its medium-term expansion strategy, with seven additional companies acquired or integrated into the RPM group.
Looking ahead, the company is well positioned to deliver strong growth in the second half of fiscal 2022 and another potential record annual result for the group.
Commenting on the record half-year performance, CEO Clive Finkelstein said, “The benefits of RPM’s customer acquisition and business integration strategy began to be felt in the first half.
“Our complementary businesses and brands, along with successful cross-selling and services, have supported RPM Automotive Group’s strong growth across all financial metrics, even under challenging operating conditions given the impacts of COVID-19.
“While early in the semester, shutdowns took place in key markets affecting some retail conditions, demand for RPM’s commercial tires, accessories and repairs continued in essential service sectors. , including transport, mining and agriculture.
“Once trading opened, revenue from our Repairs & Roadside Assistance, Motorsports, and Performance & Accessories division increased, supporting a 73% increase in revenue to $34.4 million.”
Despite the effects of COVID-19, all four RPM divisions performed well, recording strong growth in key metrics.
The revenue growth achieved, combined with operational optimization and disciplined cost management, saw gross profit increase by 40% to $10.9 million and EBITDA by 63% to $3.1 million.
RPM continued to roll out its medium-term expansion strategy, with seven complementary businesses acquired or integrated into the RPM group during H1 FY22:
- Opening of RPM Autoparts distribution centers in Townsville (QLD) and Gippsland (VIC);
- Acquisition of the Carline store and direct tire wholesaler in Far North Queensland;
- Completed acquisitions of Citic Autoparts (now RPM Autoparts), Elite Tire Group and Super Tire Mart; and
- Entered the caravan and motorhome sectors with the acquisition of Safety Dave.
Finkelstein adds: “The successful integration of our recent acquisitions, coupled with the addition of new brands and product lines, has strongly positioned the RPM Automotive Group for its next phase of growth.
“We have had a very busy past six months delivering good business results and supporting our customers. We completed the acquisitions of Citic Autoparts (now RPM Autoparts), Elite Tire Group and Super Tire Mart. Carline Store and Direct Wholesale Tires in Far North Queensland were acquired.
“We have also opened RPM Autoparts distribution centers in Townsville [Queensland] and Gippland [Victoria] to more effectively support this larger footprint.
“This increased EBITDA by 63% to $3.1 million and increased gross profit by 40% to $10.9 million.”
“Towards the end of the semester, we also entered the caravan and motorhome sectors with the announcement of our acquisition of Safety Dave, while expanding our wholesale product offering, with RPM becoming a secondary radial distributor of car and tier 1 truck and bus tires. These will provide several cross-selling opportunities with other divisions.”
The record results achieved in H1 FY22, along with the successful execution of the business expansion strategy and improved cost management efficiencies, position RPM to drive strong growth in H2 FY22 and another record full year result for the group.
Finkelstein adds, “RPM Automotive Group is on track to achieve ambitious goals and expansion goals to serve more customers with more products through multiple distribution channels.
“The integrations of acquired businesses are going well, and we have recently significantly strengthened our management team to match our strong growth profile and use the funding we have available to support our growth-by-acquisition strategy.
“As business conditions begin to become less volatile, we are confident in our ability to deliver the strong growth expected for the remainder of FY22.
“RPM is well positioned to capitalize on the growing demand for automotive aftermarket products and services and to become a leading Australian company operating well-known brands in the transport and automotive aftermarket sectors. »