NATIONAL parts and accessories company, RPM Automotive Group, has posted a strong third-quarter result with revenue up 48 per cent to $21.5 million on high customer demand and new acquisitions.

The publicly listed company, which operates under retail names including Carline, said the results were also attributed to increased sales of its commercial and wholesale passenger tyres, a normalised Formula 1 calendar, successful integrations of acquired businesses, fleet contract roll-out, cross-channel selling and a solid distribution network.

In its statement to the Australian Securities Exchange (ASX), RPM CEO Clive Finkelstein said the company had also completed its acquisition of safety equipment provider Safety Dave, with its sales totalling $1.6 million “while only trading as an RPM subsidiary for two months of the period.”

“We also became the official distributor of SSW Wheels in Victoria and Queensland and continued our organic growth signing two leases for tyre service stores in Sydney and Adelaide,” he said.

“Our cross-channel selling strategy is starting to accelerate with Safety Dave now selling direct to the aftermarket through various product packages created specifically for RPM’s Performance and Accessory stores and expanded product ranges now being available through Safety Dave.

“Pleasingly this strategy is starting to show through the solid margin expansion achieved this quarter.”

RPM posted gross profit up 79 per cent to $7 million, from $3.9 million in the third quarter of FY21. Earnings before tax and depreciation were up 77 per cent to $2.3 million (previously $1.3 million).

On year-to-date figures, gross profit is up 85 per cent to $18.7 million.

It has led it to upgrade its guidance for revenue for the full financial year to between $80 million and $85 million (previously $78 million), and EBITDA to between $7.2 million and $8.2 million (previously estimated at a bit over $7 million).

Fuelling future earnings are factors including RPM’s expansion into Far North Queensland.

Mr Finkelstein said FNQ “continues to out-perform expectations.”

“In addition, our new warehouses in Queensland and Victoria have strengthened our expanding distribution network and are supporting the rollout of our brand and product cross-channel strategy,” he said.

“Over the quarter we experienced a boom in accessories demand with Carline stores specifically sourcing more bolt-on products and accessories through our warehouses and their ability to manage increased volumes of Formula Off-Road, Genie Headers and Safety Dave products.

“With the motorsport calendar back to normal and the Formula 1 Grand Prix returning to Melbourne after a two-year hiatus, it is pleasing to see our motorsport division bounce back with a very strong quarter.

“We had anticipated strong demand in motorsport during Q3 and had pre-built inventory in preparation.

“We’re delighted that this allowed us to convert inventories to strong sales across the quarter. With our increased ability to quickly manage and move high levels of stock through the broader network, we met the surging demand for new safety racewear.”

Mr Finkelstein said that organic growth across all the company divisions was increasing and with the addition of new businesses, RPM was strongly positioned to capitalise on the growing automotive aftermarket sector.

“We look forward to this continued growth that we believe will ultimately help us reach our goal of becoming a leading Australian business operating well-known brands across the transport and automotive aftermarket sectors.”

By Neil Dowling