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Highlights

  • Australian vehicle sales increased 2.7% in July 2024, reaching 99,486 units.
  • ASG’s revenue surged 26.3% in 1HFY24, but NPAT growth was modest at 1%.
  • ASG expects stable revenue growth and focuses on dealership acquisitions for expansion.

Autosports Group Limited (ASX: ASG) is a prominent luxury car retailer in Australia. It specialises in new and used vehicle sales. The company also distributes finance and insurance products. Additionally, it sells aftermarket products and spare parts.

 New Vehicle sales continue to grow

Data released by the Federal Chamber of Automotive Industries (FCAI) on 5 August 2024 reveals a continued upward trajectory in new vehicle sales across Australia. In July 2024, sales climbed to 99,486 units, marking a 2.7% increase compared to July 2023, the previous highest for the month.

New vehicle sales growth is expected to continue in the near future  amid an expected decline in interest rates next year, which is anticipated to make auto loans more accessible and stimulate purchases. Additionally, the surge in electric vehicle (EV) adoption, supported by government incentives and advancements in charging infrastructure, is poised to positively impact the automotive sector, potentially leading to increased revenues for companies in the industry.

Insights and outlook for ASG

In the first half of FY24, Autosports Group experienced a 26.3% annual increase in total revenue to AUD 1,341.6 million, driven by a rise in new vehicle sales amid a normalised supply chain and a strong luxury market. Despite this revenue growth, the company's net profit after tax (NPAT) saw a modest 1% increase to AUD 35.5 million, due to a substantial AUD 14 million rise in interest costs compared to the previous period. ASG is scheduled to release its full FY2024 earnings report on 22 August 2024.

Company outlook

 The company anticipates that a steady supply of new vehicles and a robust luxury market will contribute to stable revenue growth in the second half of the year. Additionally, ASG expects service and parts revenue to exceed trends due to enhanced vehicle delivery. The company is also concentrating on acquiring dealerships to drive growth and aims to achieve approximately AUD 250 million in annual revenue increase through these acquisitions.

Stock performance

The stock price of ASG has gained approximately 2.34% over the past month, however, it has decreased around 8.78% in the last six months. It has a 52-week low of AUD 2.020 and a 52-week high of AUD 2.770 and is currently trading below the average of these 52-week high and low values.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 16 August 2024. The reference data in this article has been partly sourced from REFINITIV.