Why is Bapcor (ASX:BAP) in news today?

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Highlights:

  • Bapcor confirms group sales guidance at the Macquarie Conference.
  • Bapcor’s presentation shows that it is focused on delivering a pro forma earnings of FY 2021 level.
  • BAP share price on the ASX is however down by 1.18% on Tuesday (3 May 2022, 10:30 AM AEST).

ASX-listed vehicle parts supplier, Bapcor Limited (ASX:BAP), has shared its Macquarie Investor Conference presentation on the ASX today morning (3 May 2022).

Bapcor is a vertically integrated business for automotive parts, serving wholesale and retail customers Australia and Asia Pacific. The business has delivered pro forma earnings of at least FY21 level and sales in its core trade and Burson business are also up.

Despite presenting positive numbers at the investor meet, BAP shares have turned red today morning, dropping almost 1.18% to trade at AU$6.650 a share.

Key Highlights from Bapcor Limited’s presentation

Bapcor Limited is a product focused, specialist businesses in the automotive parts space with an omni-channel network. In the Macquarie Investor Conference Bapcor highlighted in its presentation the following facts related to its performance.

  • On its revenue mix, Bapcor said that, 90% of its business revenues is attributable to parts non-discretionary parts and about 10% comes from discretionary retail spend.
  • The business growth based on its FY21 results, as per the ASX announcement, shows the CAGR from FY14 to FY21.

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  • Bapcor has claimed a strong performance backed by strong market demand free from the impact of lockdown and supply chain disruptions in FY22 third quarter.
  • In the remaining part of FY22, with fundamental business drivers calmingly remaining strong, Bapcor continues to aim to deliver pro forma earnings, minimum of the level of FY21.

 

What is Bapcor’s strategy for achieving this?

According to the ASX announcement by Bapcor, its strategy is largely the same with an emphasis on-

  • Driving its network footprint expansion in both physical and online space.
  • An enhanced market offering and Bapcor owned brands overtaking other recognisable ones
  • For this, Bapcor is reportedly investing in its team members.
  • It is also hopeful of minimising ‘bad cost’ and invest in ‘good cost’. It is also focused on like business processes and systems to improve and optimise itself.

Bapcor’s road ahead

As claimed by Bapcor Limited, the group efficiencies are not yet fully leveraged, and still significant opportunities exist for the business. Therefore, Bapcor remains focused on increasing profitability via Pricing, Procurement and Property management optimisation. It is also planning to leverage end to end supply chain advantages and invest in technology to improve use of digital business. Whether or not Bapcor’s decisions help, however, will only be known with time.

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