Key Highlights

  • Matthew Smith became managing director on 1 November 2026, and David Johnstone joined the board on 5 November as incoming chairman.
  • Revenue fell 10% to $102.1 million in FY26, with a statutory net loss of $12.0 million.
  • Operating cash flow was $7.2 million as inventories fell from $26.2 million to $21.5 million.
  • Net Debt was $24.7 million, and the lender waived a breach of certain banking covenants after the June balance date.

RPM Automotive Group (ASX:RPM) has changed its Leadership as it works through a turnaround programme. Matthew Smith became managing director on 1 November 2026. New director David Johnstone then joined the board on 5 November and is due to take over as chairman from Lawrence Jaffe at the Annual General Meeting on 25 November 2026.

The changes follow a difficult 2026 financial year. RPM reported a statutory net loss of $12.0 million and net debt of $24.7 million. According to its annual report, its lender waived a breach of certain banking covenants after the June balance date.

What RPM does

RPM is an operating business, not an explorer. It sells wheels, tyres, accessories and apparel to wholesale and retail customers in the Australian automotive aftermarket. Its brands include Revolution Tyre Services, Revolution Racegear and RPM Autoparts.

According to its FY26 results, released on 27 August 2026, Revenue fell 10% to $102.1 million. The company blamed a broader downturn in the tyre sector, more competition and pressure on pricing. Gross Margin fell to 34.3% from 36.0%. EBITDA before Goodwill Impairment was $2.3 million, down from $13.0 million, after $5.2 million of one-off items linked to closing underperforming operations and the strategic review. The loss also included a $4.0 million non-cash goodwill impairment.

Cash flow improved. Operating Cash Flow was $7.2 million, and stricter Working Capital Management reduced inventories from $26.2 million to $21.5 million and receivables from $17.0 million to $12.3 million.

Leadership turnover

Mr Smith is RPM's third chief executive since September 2024. Clive Finkelstein, who had been interim chief executive since September 2024, stepped down in April 2026 and was replaced by Roy Norris. RPM said on 10 August that Mr Norris had resigned, effective 7 August, after discussions with the board, and that both sides had agreed the change was in the company's best interests.

According to the 2 November announcement, Mr Smith has been managing director and chief executive of Marathon Consolidated, an unlisted company with interests in tyre retailing, food and packaging, since 2014. Mr Jaffe will stay on the board as a non-executive director after the AGM.

Debt and the turnaround plan

At 30 June 2026 RPM had borrowings of $31.9 million and $7.2 million of cash. The Annual Report says certain financial covenants were not met at 30 June. After year end the financier gave a formal Waiver for this occasion. Because of the breach, the bank debt was classified as current. The company says this is an accounting requirement and does not change the contractual Maturity of the facilities.

The board's FY27 priorities include reducing debt, restoring gross margin towards historical levels, cutting operating costs, simplifying the supplier and Brand portfolio, and growing profitable revenue. These are company goals, not forecasts. RPM has said the initiatives will take time to execute.

Risks and upcoming dates

The main risks are the relationship with RPM's lender and any further covenant tests, continued weakness in tyre Demand and pricing, and the execution risk of yet another leadership change. The company's Equity is small compared with its debt, so changes in Earnings can affect shareholders sharply. The AGM on 25 November 2026 is the next confirmed date.