ARB Corporation Ltd (ASX: ARB) has released its FY19 results this morning, reporting modest growth across most facets of the business. Here’s what you need to know…
About ARB
ARB Corporation started in 1975 when founder Anthony Ronald Brown began making products out of his family garage. The products were well-engineered and durable, perfect for the extreme conditions experienced in the outback. Today ARB Corporation is the largest manufacturer and distributor of 4×4 accessories in Australia.
The 3 Key Points
- Sales revenue grew 5% to $443.89 million
- Net profit after tax (NPAT) increased by 12.1% to $57.13 million
- A final dividend of 21 cps was declared, up 7.7% from FY18
Analyst Estimates
Bell Potter analysts estimated NPAT of $56 million while the consensus NPAT estimate for FY19 was $57.48 million. The actual result came in between these two figures at $57.137 million.
Other Important Points
The growth in revenue and NPAT are encouraging on their own, but it helps to add a historical perspective. Over the last 10 years, sales revenue has grown at a compound annual growth rate (CAGR) of 8.8% per year, with 5% growth in FY19 falling below the average.
The CAGR of NPAT over the last 10 years is 9.7% per year, with growth of 12% in FY19.
Broken down into categories, the Australian Aftermarket category saw growth of 1.6% and accounted for 62.9% of FY19 sales. The Exports category grew by 9.8% and accounted for 29.4% of sales. The Original Equipment category saw the highest growth of 17.1% but accounted for only 7.7% of overall sales.
Management Commentary
ARB Chairman Roger Brown said it was a difficult year for the company with a falling dollar and declining new car sales.
“The Company’s growth in 2018/19 was hampered by difficult local and global market conditions,” Brown said.
“Specifically, new car sales in Australia posted their biggest annual fall in more than nine years. In addition, the Australian dollar declined to its historically weakest position against the Thai Bhat.”
Mr Brown said that conditions remain uncertain, but ARB is confident of long-term success.
“With strong brands around the world, capable senior management and staff, a strong balance sheet and growth strategies in place, the Board believes ARB is well positioned to achieve long term success,” he said.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.
