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Date : 02/03/2023

Eagers Automotive (ASX: APE) Shares Surged 9% After Announcing A Record Dividend In FY22

Eagers Automotive Ltd (ASX: APE) is a leading automotive retail company in Australia and New Zealand. The company operates a network of over 230 car dealerships. It has a presence in all major metropolitan areas in Australia and New Zealand.

Eagers Automotive’s portfolio includes new and used car sales, as well as servicing, parts, and finance and insurance services. The company represents a range of well-known automotive brands, including Toyota, Ford, BMW, and Volkswagen.

Eagers Automotive’s history dates back to 1913, and the company has been listed on the ASX since 1957. The company has pursued an aggressive acquisition strategy in recent years, acquiring several automotive retail businesses to expand its market share and grow its revenue.

The Eagers Automotive share price surged high at 9% after announcing a record dividend in FY22. The company declared an all-time-high yearly dividend of 71 cents per APE ASX share for FY22. If we compare this to the same period in FY21, we see an increase of 13.6%. This year’s final dividend payout will be 49 cents per APE share.

ASX APE: FY22 Results Highlights

At market close, ASX: APE shares are trading at $13.00, a 9% increase from the opening price. Throughout the day’s trading, the price reached a high of $13.44, up 12.65% from yesterday’s closing price of $11.93.

ASX APE Shares Forecast

Here’s a comprehensive look on Eagers Automotive Group (ASX APE) shares analysis:

  1. Its statutory profit before tax is $442.2 million (FY21: $456.8 million).
  2. It announced an underlying operating profit before tax of $405.2 million (FY21: $401.8 million).
  3. The company has a strong financial position or available liquidity of $631.1 million.
  4. Eagers Automotive announced a record fully franked dividend of 49 cents per share. (FY21: 42.5 cps).

APE: What Else Occurred During FY22?

Eagers Automotive (ASX APE) attributed the record profit to “continuous excellent return on sales via a reset cost base and ongoing emphasis on technology-enabled efficiency gains,” as well as the continued high demand for new and used vehicles.

It also highlighted the ongoing investment in strategic relationships and the smooth purchase and incorporation of the multi-franchised dealership groups in the Australian Capital Territory (ACT) and the state of South Australia.

Substantial elements contributed to the $37 million net income before tax reported for FY22. This is mostly attributable to the profit realized from the Bill Buckle Auto Group sale.

APE: CEO Remarks

CEO of Eagers Automotive, Keith Thornton said that our reset and more effective operational platform led to a record full-year underlying profit in addition to the strength of continued market dynamics. The Board’s confidence in our view for 2023 and beyond is reflected in our record dividend.

With a 74% increase in our order backlog for new vehicles in 2022, we reached a new peak with a longer run-off period and a substantial increase in embedded gross profit that will underpin future trading performance.

Outlook On Eagers Automotive Limited

The company has provided an outline of its goals and objective for the year 2023, which reflects its approach to leverage on the acquisitions and increase its revenue. The company plans to seek further strategic acquisitions and partnerships to enhance its footprint. The company plans to increase revenue to explore new opportunities in Greenfield and transition to new energy and low-emission vehicles.

Conclusion

Are ASX: APE shares on the to buy list?

The company plans to expand its horizons and explore new opportunities in Greenfield and other markets, positioning it as a strategic player in the sector. The APE share price has surged well in the past month and is a good opportunity for investors interested in automotive stocks.

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