What drove surge in GUD Holdings' (ASX: GUD) share price on Tuesday?

2 min read | May 14, 2024 04:46 PM AEST | By Team Kalkine Media

Google News:

What drove surge in GUD Holdings' (ASX: GUD) share price on Tuesday? — Image source: Pexels

Recent News

WTC (ASX:WTC): Is This Tech Rebound Hiding a Bigger Market Shift?

ASX 200: Why Is Macquarie (ASX:MQG) Standing Apart From Banks?

Telstra, BHP and Suncorp: Why the Franking Calendar Squeeze Is Turning...

What Is Weighing on CBA and ASX Bank Stocks Today?

Make Kalkine Media
My Trusted Source

Investors in the S&P/ASX 200 Index witnessed a standout performance on Tuesday, fueled by the impressive rally of GUD Holdings Ltd (ASX: GUD). The diversified automotive market products company surged ahead, with its shares experiencing a remarkable uptick. While the broader ASX 200 closed lower on Tuesday, dropping 23.20 points or 0.30% to 7,726.80, GUD Holdings commanded attention with its stock price soaring by around 12% and closing at AU$10.960.

The surge in GUD Holdings' share price can be attributed to the company's confirmation of its earnings guidance for the full 2024 financial year (FY 2024). According to the latest updates, the company expects its underlying earnings before interest, taxes, and amortisation (EBITA) for FY 2024 to be at least AU$193.5 million, in line with management's prior expectations and based on updated unaudited estimates from April 2024.

GUD Holdings' automotive segment, excluding its AutoPacific Group (APG) segment, continues to perform strongly across all key business units, reflecting the successful execution of its diversification strategy and the resilience of the aftermarket. Additionally, positive end-user workshop demand further underscores the company's robust performance in this segment.

However, challenges persist for the APG segment, which GUD Holdings acquired in November 2021. The company now anticipates APG to deliver approximately AU$63 million in underlying EBITA for the full financial year, slightly below previous expectations due to various headwinds. These include slower-than-expected recovery in the New Zealand market and lower Toyota volumes, coupled with emerging consumer-related softness in the trailering market.

Despite these challenges, management remains optimistic about the outlook for APG, expecting revenue and EBITA growth in FY 2025 as headwinds gradually subside and new business wins contribute to performance improvement.

Moreover, GUD Holdings' corporate costs, cash conversion, and leverage are tracking in line with management's expectations, further bolstering investor confidence in the company's financial health and operational efficiency.

Beyond its operational performance, GUD Holdings is also a favourite among passive income investors due to its consistent dividend payments. The company maintains a strong track record of paying two fully franked dividends per year, with a total payout of 40.5 cents per share for the previous fiscal year. At the current share price, GUD Holdings offers a fully franked trailing yield of 3.8%, making it an attractive option for income-oriented investors.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.