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Revenue: Increased by 11% to $1.519 billion. Gross Margin: Improved to 19.1%. Normalized Profit Before Tax: Grew 75% to $35.3 million. Statutory Net Profit After Tax: Up 107.6% to $21.7 million. Dividend: Increased by 43% to $0.05 per share, fully franked. Number of Outlets: Expanded to 87 vehicle and motorcycle outlets. New Vehicle Revenue: Up 9%. Used Vehicle Revenue: Up 11%. Service Revenue: Increased by 12%. Parts Revenue: Increased by 16%. Earnings Per Share: Grew by 107.4% compared to the prior period. Operating Cash Flow: $22.4 million with a cash conversion of 67%. Corporate Debt: $298 million. Property Assets: Valued at $232 million with an additional $31.8 million of unrecognized equity. Acquisitions: Added businesses representing Porsche, Mercedes-Benz, Audi, Land Rover, Volvo, Polestar, and Geely.

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Release Date: February 18, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Autosports Group Ltd (ASX:ASG) reported an 11% increase in revenues to $1.519 billion for the first half of FY26. Gross margins improved to 19.1%, with a 75% growth in normalized profit before tax to $35.3 million. The statutory net profit after tax increased by 107.6% to $21.7 million, leading to a 43% increase in the fully franked interim dividend to $0.05 per share. The company has a strong presence in the luxury segment, with 87 vehicle and motorcycle outlets, 75 of which are in the core premium segment. ASG's acquisition strategy has been successful, adding high-value brands like Porsche, Mercedes-Benz, Audi, and Land Rover, contributing to revenue growth.

Negative Points

The market is experiencing flux with new brands entering, new taxes, and high levels of interbrand competition, posing challenges. Interest costs have increased by $345,000, although they have stabilized on a like-for-like basis. The company faces potential risks from rising interest rates, which could impact the luxury market's affordability. There is a seasonal expectation of a slight drop in gross margins in the second half of the year due to a higher proportion of new car sales. The company's cash conversion was impacted by timing in working capital movements, with a total working capital impact of $55.6 million.

Q & A Highlights

Q: Can you discuss the factors contributing to the strong gross margin outcome and how it might change in the second half? A: Nicholas Pagent, CEO: The improvement in gross margin is due to a better inventory mix and disciplined revenue writing in the new car segment. The back end of the business also grew well, supporting margins. Typically, there's a slight drop in gross margin in the second half due to a higher proportion of new car sales, but this is a seasonal mix change.

Story Continues

Q: How do you view the luxury market's performance relative to the broader market, especially with potential interest rate increases? A: Nicholas Pagent, CEO: While interest rate hikes can impact the luxury market, luxury brands have flexibility through OEM-based finance companies to absorb these increases. The luxury segment is less affected by new brand disruptions and is expected to remain resilient and consistent, especially with strong product portfolios from major German brands.

Q: Can you provide insights into the order book and new vehicle revenue trajectory? A: Nicholas Pagent, CEO: The order book is strong, with a 13% increase in January, despite cycling better comp data. We expect small organic growth in order rates and improved sales mix. The stock profile is better than last year, allowing for more sensible trading outcomes.

Q: How are the recent acquisitions performing, and are they meeting expectations for EPS growth? A: Nicholas Pagent, CEO: The acquisitions are tracking well and meeting expectations. Porsche and Mercedes Canberra have started strong, and the Barry Burke business, despite a slightly later settlement, has shown good order rates. We are confident in achieving the initial EPS growth guidance.

Q: What is your strategy for greenfield opportunities and further expansion? A: Nicholas Pagent, CEO: We focus on expanding within existing brand partnerships, particularly with July Holdings Group. We aim for businesses that align with our gross margin targets and avoid entering volume segments that could compress margins. Our strategy remains within our core competencies.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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