Bapcor Limited (ASX: BAP)

Exceptional Performance: Statutory revenue and net profit after tax for H1 FY 18 for Bapcor increased by 41.6% and 72.2%, respectively, as compared to H1 FY17. Earnings per share for H1 FY18 was 14.61 cents per share and was up by 37.3% as compared to H1 FY17. Net Debt as on 31 December 2017 was $337.1 million that represented a leverage ratio of 2.2x. Bapcor is on track to record a leverage ratio of <2x by 30 June 2018. A final fully franked dividend of 7.0 cents per share was declared and was up by 27.3% as compared to the H1 FY17 interim dividend. Bapcor’s Dividend Reinvestment Plan will be in operation for the 2018 interim dividend. The Retail and Services segment consists of Autobarn, AutoPro, Sprint Auto Parts and Carparts retail stores. Revenue for H1 FY18 increased by 5.4% as compared to H1 FY17 which included a higher mix of company owned stores versus franchise operations across its store networks. Same store sales growth for franchise stores was 1% and company owned stores was 5%. Bapcor is forecasting continued revenue and profit growth in H2 FY18 through underlying business performance that is supported by the benefits realised through business optimisation and store network growth. Bapcor’s previous full year guidance for FY18 remains unchanged at 30% growth in Pro-forma NPAT from its continued operations. Looking at the outlook and potential, we recommend a “Speculative Buy” at the current price of $5.60
 

Financial Performance (Source: Company Reports)
 

Super Retail Group Limited (ASX: SUL)

Improvements in Digital experience: SUL plunged heavily by about 14.47% on February 20, 2018, as the group announced net profit after tax that was attributable to the owners for the 26-week period to December 2017 of $72.2 million (down 3%) and after adjusting transformation cost, normalised net profit was $74.9 million that is an increase of 0.7 per cent on the prior comparative period. Group costs were $10.2 million during the half and included corporate costs, unutilised storage space and investment in the Group’s digital initiatives. Investment amounting to $3.0 million in the Group’s related party digital business and certain omni-retail initiatives has been expensed rather than capitalised due to the early development phases of these projects. Operating cash flow pre-store investment was $303.8 million and was $30.0 million higher than the prior comparative period. The Group has maintained its focus on working capital management and the closing net inventory investment was $73.8 million, that is $52.6 million lower than the prior comparative period. The Group is planning to open approximately five new stores, close four stores across the Group and integrate the RebelFit eight standalone stores in the second half. SUL also updated about acquiring New Zealand outdoor equipment brand Macpac for $144 million and this is expected to be mid-single digit EPS accretive in FY 2019. Meanwhile, the stock seems to be hammered by the investors while the result was a mixed one with shortcomings seen for Leisure segment. Some concerns are also raised in relation to the latest acquisition news. We recommend to “Hold” the stock at the current price of $7.03
 

Financial Performance Trend (Source: Company Reports)

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