Can RPM’s New Tyre Recycling Plant Sustain Its Profit Momentum?
RPM Automotive Group has launched a fully operational tyre recycling plant, boosting its earnings potential while reporting steady revenue and improved profitability for the nine months FYTD.
- New tyre recycling facility fully operational and exceeding early output expectations
- Nine months FYTD sales revenue up 1.4% to $89.9 million
- EBITDA increased 8.2% to $9.5 million
- FY25 guidance maintained at $120 million revenue and $12-13 million EBITDA
- Strategic focus on National Fleet, Tyre Division expansion, and recycling program rollout
RPM’s New Recycling Venture
RPM Automotive Group Limited, a key player in Australia’s automotive aftermarket, has officially opened its new tyre recycling facility. The plant is already fully operational and early production levels are surpassing initial forecasts, signaling a promising new revenue stream for the company. This move aligns with broader industry trends towards sustainability and circular economy initiatives, positioning RPM as a forward-thinking leader in tyre lifecycle management.
Solid Trading Performance Amid Market Normalisation
For the nine months ending in the current fiscal year, RPM reported sales revenue of $89.9 million, marking a modest 1.4% increase compared to the prior corresponding period. More notably, EBITDA rose by 8.2% to $9.5 million, reflecting improved operational efficiency and margin expansion. The company attributes this performance to the normalisation of trading conditions post-pandemic, enhanced procurement strategies, and strong demand across its product range.
Financial Health and Strategic Priorities
RPM remains comfortably within its banking covenants and maintains ample funding to support both working capital needs and organic growth initiatives. The company’s strategic imperatives include expanding its National Fleet business, growing the Tyre Division, and continuing the rollout of its tyre recycling program. These priorities underscore RPM’s commitment to both market expansion and environmental responsibility.
Outlook and Guidance
RPM has reaffirmed its full-year 2025 guidance, targeting revenue of $120 million and EBITDA between $12 million and $13 million. CEO Clive Finkelstein expressed confidence in the company’s trajectory, highlighting the recycling facility’s potential to exceed processing forecasts and the steady performance of traditional business units. Looking ahead, RPM plans to maintain tight control over operating expenses while capitalising on stable customer demand and margin improvements.
Bottom Line?
RPM’s tyre recycling initiative could redefine its growth trajectory, but investors will watch closely for sustained production and margin gains.
Questions in the middle?
- How will the tyre recycling facility impact RPM’s profitability in FY26 and beyond?
- What are the capital and operating costs associated with scaling the recycling program?
- How might shifts in automotive aftermarket demand affect RPM’s National Fleet and Tyre Division growth?
