The revenue was up 14.8 per cent on the previous corresponding period. The company also delivered an underlying operating profit before tax for the half year of $207.4 million, an increase of 6.3 per cent on the first half of 2022.

Eagers Automotive CEO Keith Thornton said that the performance was driven by improved new-vehicle supply and continued strong demand for new and used cars, together with margin growth in new vehicles, finance, insurance and car care and a “significant” profit improvement in independent pre-owned and strong performance from its large-scale parts and service operations.

He also attributed the earnings growth on strong cost management in a high inflationary environment that was assisted by technology-enabled productivity improvements; and organic, greenfield and acquisition initiatives delivering growth in revenue and profit.

“Demand for new and used vehicles remained resilient, underpinning growth in our new-car business and profit improvement in our independent pre-owned vehicle business, easyauto123,” he said in his statement to investors.

Keith Thornton

“Our performance also benefited from the contributions of strategic acquisitions and partnerships executed in 2022 and 1H23, particularly in the new energy vehicle segment where we are building a unique and market leading position.

“Our total new car order bank remains very strong and provides material embedded margin strength, with outperformance possible as vehicle supply constraints begin to ease across the industry. 

“We are on track to exceed our revenue growth expectations for FY23 and maintain a sustainably strong return on sales margin. Combined with the strength of our balance sheet, we are well positioned to pursue further growth opportunities.”

The half year was highlighted by the successful integration of the ACT and South Australian acquisitions (completed in the second half of last year) and that of Ireland’s dealership in Cairns.

There were also contributions from partnerships including in the new-energy vehicle (NEV) market, capped by Eagers’ exclusive national retail agency for the fast-growing BYD EV brand. In the six months, Eagers increased its share in EV Dealer Group Pty Ltd, the exclusive national retail joint venture for BYD, to 80 per cent from 49 per cent.

Mr Thornton said there was a “significant” profit improvement in the independent pre-owned business easyauto123 and Carlins Auctions and continued strong performance from its parts and service businesses.

He said that the second half of this calendar year sees Eagers in a very strong financial position underpinned by a substantial property portfolio and asset base, together with $758.1 million of available liquidity (at June 30, 2023).

“This liquidity position includes record available cash and undrawn commitments under corporate debt facilities,” he said.

“The strong liquidity position will enable the company to pursue further disciplined capital management initiatives including investment in organic and greenfield initiatives, continuing to review accretive M&A opportunities and investing in the development and deployment of proprietary technology to further drive productivity gains.”

He said the current half year shows that demand for Eagers’ services remains resilient and that he expected demand “to be broadly in line with supply across the industry for the full year.”

“This balanced supply and demand environment, together with our material order bank with strong embedded margin, underwrites our expectations of a sustainably strong return on sales margin across the business,” he said.

“We expect to be able to sustainably and profitably grow our business, expand our industry leading footprint across Australia and New Zealand and accelerate our strategic position in the transition to NEVs.

“We will continue to invest in adjacent and enabling opportunities and explore new market potentials by delivering great outcomes for our customers and OEM partners.” 

Eagers’ underlying operating profit before tax was $207.4 million, up 6.3 per cent on the previous period, and the board has approved payment of a record, fully franked, interim dividend of 24 cents per share, up 9.1 per cent on the first half of 2022 when it paid 22c/share.

By Neil Dowling