AUSTRALIA’S biggest vehicle retail group, Eagers Automotive, has posted a 13.4 per cent jump in revenue for the first six months of 2024 but market pressures including high interest rates have bitten into the company’s profits,

The listed group recorded revenue in the six months to June 30 of $5.5 billion, up 13.4 per cent on the same period in 2023, and net profit of $123.4 million, down 18 per cent. The company will deliver an interim dividend of 24 cents a share.

Eagers CEO Keith Thornton said the Reserve Bank’s monetary policy was having “its desired effect” in the auto industry with reduced discretionary spending in the retail sector and a shift to more value-conscious buying.

But Mr Thornton remained optimistic and upbeat about the economy.

Keith Thornton

“Pleasingly, overall demand has been remarkably stable with fleets becoming increasingly active as normal supply returns,” he said.

“The impact of high interest rates specifically, and inflationary pressures more generally, continue to weigh the overall result.

“Despite these market challenges we have produced another resilient result with record revenue for the half supporting a record first-half EBITDA performance (of $265.9m, up 4.6 per cent).

“This demonstrates the true health of our underlying business.”

Eagers stated that its financial position had strengthened thanks to a “substantial” property portfolio and asset base along with $444.7 million in available liquidity (cash and undrawn debt facilities).

After the end of the half-year reporting period, the company has completed a refinance of its syndicated term debt and property debt facilities which “will provide the company with the balance sheet strength and flexibility to pursue future growth opportunities.”

These opportunities include investment in organic and greenfield initiatives, accretive mergers and acquisitions opportunities and investment in proprietary technology to further drive productivity gains, the company said in its financial report.

“We continue to execute against our property strategy with the further acquisition of $56 million in about 37,000 square metres of prime property expected to settle in the second half of this year,” it said.

Mr Thornton said the outlook for the second half of the calendar year “will continue to present challenging conditions as the company navigates external cost pressures, OEM inventory levels and lower consumer confidence.”

“Despite this we are well positioned for upside in key parts of our business including our growing retail joint venture, Australia’s largest pre-owned retail business Easyauto123 and improving performance from acquisitions,” he said.

“Looking beyond the short-term challenges, Eagers Automotive continues to be enviably positioned.

“We continue to review multiple growth opportunities and our balance sheet strength and recently fortified liquidity position provides the firepower to capitalise on any compelling options.

“As always, we continue to prioritise initiatives that drive further productivity gains and make Eagers a more resilient business in any operating environment.”