Amotiv’s Net Profit Falls to $33M Despite 2.3% Revenue Rise
Amotiv Limited’s interim results reveal a 34.3% decline in net profit despite a 2.3% revenue increase, driven by significant impairments and restructuring costs. The company declared a fully franked interim dividend of 18.5 cents per share.
- Net profit after tax down 34.3% to $33.0 million
- Revenue up 2.3% to $503.7 million, organic revenue down 3.0%
- Significant impairments of $10.4 million and restructuring costs of $8.9 million
- Interim dividend declared at 18.5 cents per share, fully franked
- Leverage ratio increased to 1.75x with $203.2 million unused borrowing capacity
Financial Overview
Amotiv Limited has released its interim financial results for the six months ended 31 December 2024, reporting a net profit after tax of $33.0 million. This represents a sharp 34.3% decline compared to the prior corresponding period, despite revenue increasing by 2.3% to $503.7 million. The revenue growth was supported by acquisitions completed in FY24, but organic revenues declined by 3.0%, reflecting ongoing headwinds in key markets including New Zealand, Caravan/RV, and the APG Top 20 segment.
The reported operating profit before interest and tax fell 23% to $63.4 million, while underlying profit before interest and tax (EBITA) was down slightly by 1.2% to $85.8 million. Underlying profit after tax was relatively stable, decreasing marginally by 0.7% to $51.1 million, highlighting the impact of significant one-off costs on reported earnings.
Impairments and Restructuring Impact
The period was marked by substantial impairments and restructuring expenses. The company recorded $10.4 million in impairment charges, predominantly related to the Fully Equipped New Zealand business, which faced a depressed macroeconomic environment. Additionally, restructuring costs amounted to $8.9 million, covering technology projects, integration of acquisitions, and operational consolidations.
These significant items, totaling $22.4 million before tax, weighed heavily on profitability and contributed to the decline in reported net profit. Management emphasized proactive cost controls and operational efficiencies, which helped mitigate some margin pressures, particularly in the 4WD Accessories & Trailering and Lighting, Power & Electrical segments.
Segment Performance and Market Dynamics
Segment analysis reveals mixed performance across Amotiv’s core businesses. The 4WD Accessories & Trailering segment saw a 1.9% revenue decline, impacted by weak pickup/SUV sales and softness in caravan/RV and New Zealand markets. Lighting, Power & Electrical revenue grew 3.6%, bolstered by acquisitions and strong US sales through Vision X, although organic sales declined due to reseller destocking and market softness. The Powertrain & Undercar segment delivered a robust 5.8% organic revenue increase, driven by strong demand in wear and repair markets and successful price rises.
Underlying EBITA margins contracted slightly in some segments but were supported by disciplined margin management and cost control. The Powertrain & Undercar division notably increased EBITA by 4.8%, reflecting its resilience and ongoing investments in EV services and innovation.
Balance Sheet and Capital Management
Amotiv’s balance sheet remains solid with net assets of $931.6 million and a leverage ratio of 1.75x, up from 1.60x at June 2024 due to higher working capital and share buyback activity. The company maintains $203.2 million in unused borrowing facilities, providing ample liquidity to support organic growth and selective acquisitions.
During the period, Amotiv repurchased 733,269 shares, reflecting a commitment to capital management alongside the declaration of a fully franked interim dividend of 18.5 cents per share, payable on 7 March 2025. The dividend reflects confidence in the company’s cash flow generation despite the challenging operating environment.
Leadership and Strategic Outlook
The board saw changes with the resignation of Director Carole Campbell in October 2024 and the appointment of Raelene Murphy as Independent Non-Executive Director and Chair of the Audit Committee effective March 2025. The leadership team, led by Managing Director and CEO Graeme Whickman, continues to focus on executing growth strategies, innovation, and expanding the company’s geographical footprint, including the recent start-up of a South African plant.
Looking ahead, Amotiv faces the challenge of navigating subdued organic growth and market headwinds while leveraging operational efficiencies and strategic acquisitions to drive future performance. The impairment and restructuring charges underscore the need for continued vigilance in cost management and portfolio optimization.
Bottom Line?
Amotiv’s interim results highlight the tension between growth ambitions and market realities, setting the stage for a critical period of strategic execution.
Questions in the middle?
- How will Amotiv’s restructuring initiatives translate into sustainable margin improvement?
- What is the outlook for organic revenue growth amid ongoing market softness in key segments?
- How might the impairment charges affect future investment and acquisition strategies?
