ARB (ARB) H1 2025 earnings summary

Executive summary

• Sales revenue for 1H FY2025 grew 5.9% year-over-year to $361.7 million, with export sales up 15.4%, Australian aftermarket up 1.9%, and OEM sales down 1.3%.

• Profit before tax declined 0.7% to $70.3 million; profit after tax down 0.6% to $51.0 million; underlying profit after tax (excluding non-operating items) fell 4.6%.

• Strategic US expansion included increasing ORW stake to 50%, acquiring 4 Wheel Parts, and opening new stores in Australia and New Zealand.

• Interim fully franked dividend of 34.0 cents per share declared, payout ratio 55.1%.

• Major product launches and ARB's 50th anniversary reinforced commitment to growth and innovation.

Financial highlights

• Underlying profit before tax declined 4.5% year-over-year due to higher employee and transaction costs.

• Earnings per share was 61.68 cents, down 1.2%; adjusted EPS was 61.14 cents, down 5.1%.

• Gross margin remained at the upper historical range as materials and consumables improved to 41.4% of sales.

• Cash from operating activities was $45.9 million, with inventories rising to $278 million.

• Cash balance at 31 December 2024 was $22.8 million, with no debt.

Outlook and guidance

• Aftermarket and export order books remain healthy, with daily order intake strong and export growth expected to continue in 2H FY2025.

• OEM sales projected to remain steady, with new contracts under negotiation.

• US investments and acquisitions expected to drive medium- to long-term growth; management remains optimistic.

• Margins expected to hold, but FX volatility and weaker AUD are key risks for H2 2025.

• Ongoing investment in product development, store network, and people to support growth.