LISTED auto parts and accessories company RPM Automotive Group has set a high bar after posting strong increases in revenue and profits for the 2024 financial year.

The aftermarket business has announced a 3.7 per cent hike in revenue, to $121 million, and a 275 per cent jump in net profit after tax to a record $4.6 million.

RPM said the substantial increases in income and profits was attributed to new revenue streams and “exceptional” performance of its wheels and tyres division, despite economic headwinds.

RPM’s CEO, Guy Nicholls, said the company delivered earnings across the business thanks to factors including product diversity and a focus on the higher-margin parts of the company.

Guy Nicholls

Asked how the profit increased so dramatically compared with previous years, Mr Nicholls said the biggest change made was in the structure of the company.

“The company now has a group structure, rather than once based on individual parts of the business,” he said.

“We now work together as a team with a structure and strategy including KPIs and accountability and, especially, communication.” 

He said it had also invested in its people “ensuring we have the right talent and culture to drive growth.”

“Our focus on optimising resources and leveraging our diverse product portfolio has led to improved operational efficiencies and increased cross-selling opportunities,” he said.

“During FY24, margin expansion was driven by strategic pricing and more effective procurement and stock management.”

RPM’s wheels and tyres division made $43.4 million in the year – or 36 per cent of total earnings – which was up 29.5 per cent on the previous year.

RPM said that the growth came through an increase in commercial tyre orders from the trucking, agricultural and mining sectors.

It will be further boosted this financial year by the company’s integration of a partnership with Yokohama.

“This multi-year agreement establishes RPM as a national Yokohama wholesaler, anticipated to contribute about $5 million in revenue and $1 million in EBITDA in FY25,” Mr Nicholls said.While that division was up, the Repairs and Roadside division was down 18 per cent in revenue to $41.8 million as customers’ cost-of-living constraints hit home.

RPM’s Performance and Accessories division expanded its product range and distribution during the year, increasing revenue by 11.8 per cent on 2023 to $26.4 million.

“RPM saw increased organic growth despite difficult retail conditions, bolstered by current fleet and OEM contracts,” Mr Nicholls said.

“Additionally, RPM is launching a new internally-developed robotic caravan and boat mover expected to drive additional sales in the second quarter of FY25.”

The Motorsport division was up 9.5 per cent in revenue to $9.4 million as Mr Nicholls said it “reinforced its position as Australia’s market leader in soft parts and safety categories.”

In his outlook for FY25, he said the company is in a strong position and was poised for growth, driven by the start next year of its tyre recycling program. It will also be boosted by the introduction of new products, the partnership with WHG and Yokohama, and geographical expansion.

“These initiatives are expected to drive improved margins and are further supported by ongoing procurement efficiencies, strategic pricing and a shift towards higher-margin products and services,” Mr Nicholls said.

“In addition to continuing to develop our existing businesses, we remain focused on the pursuit of new business opportunities and expect that this will position the company for continued success in the evolving automotive aftermarket.”