- 01Bapcor reaffirms FY27 outlook; Q1 LFL sales rose 0.5%.
- 02Trade sales rose 2.5%, offsetting Retail weakness.
- 03Net debt fell $19m to $116m.
Bapcor (ASX: BAP) has reaffirmed its 2027 financial year outlook after returning to modest first-quarter sales growth as its automotive parts turnaround begins to take hold.
Group like-for-like sales increased 0.5% on a constant-currency basis in the September quarter, while total sales rose 0.3% on the same basis despite weakness in Retail.
Trade parts sales advanced 2.5%, including 1.6% like-for-like growth, while the Networks businesses delivered a 4.1% increase, offering signs of recovery after a difficult 2026 financial year.
Operating cash flow helped cut net debt by $19 million to $116m at 30 September, extending the balance-sheet improvement achieved through an earlier equity raising and tighter working capital management.
Trade Offsets Retail Weakness
The improvement in Trade followed pricing changes, stronger product availability, and renewed engagement with customers, with management identifying a higher market share than in the corresponding quarter.
Networks—comprising CVG, JAS, and Wholesale—contributed further growth, while the New Zealand operations recorded modest like-for-like gains measured in local currency.
Retail remained the principal drag as cost-of-living pressure and less effective promotions weighed on discretionary spending, outweighing growth in essential product categories.
Bapcor has scheduled further promotional activity around Black Friday and Christmas, although the softer trading environment remains a constraint on the broader recovery.
Even with those pressures, the targeted pricing initiatives introduced in the second half of 2026 improved gross margin percentages in both Trade and Retail compared with a year earlier.
Operating Foundations Rebuilt
The trading gains follow a reset under chief executive officer and managing director Chris Wilesmith, who joined in January and has shifted attention back to customer service, stock availability, and operating discipline.
“Over recent years, too many initiatives created confusion and took the team’s focus away from what made the business successful: delivering the right parts to customers quickly,” chief executive officer Chris Wilesmith said.
“We are now returning to these fundamentals, supported by experienced automotive aftermarket leadership, and engaging our team to help build the business for the future.”
Changes have included tighter discount controls, more data-led pricing, reduced emergency stock replenishment and improved supply-chain productivity, alongside work to reduce purchasing costs.
Inventory reductions, improved collection of overdue debtors, and related working capital initiatives generated a $68.5m cash benefit during the second half of the previous financial year.
Balance Sheet Support
Bapcor entered the new financial year after revenue fell 1.8% to $1.9 billion in 2026 and underlying net profit after tax reached $10.8m, with a statutory net loss of $431.6m reflecting substantial non-cash impairments.
A $200m equity raising and the working capital gains reduced net debt to $135m by 30 June, providing a firmer financial base for a portfolio review focused initially on smaller non-core businesses.
The strategy concentrates on parts distribution for passenger, light and heavy commercial vehicles, automotive retail, and servicing, with investment in technology and people intended to support those markets.
Management expects modest revenue growth in 2027, with benefits from the turnaround partly offset by cost-of-living pressures and the Middle East conflict and largely reinvested into the business.
Underlying net profit after tax is expected to be materially weighted towards the second half, while capital expenditure, depreciation and amortisation are expected to remain broadly in line with 2026 levels.
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