ARB Corporation Limited reported a 5.3% increase in sales revenue to $729.9 million for FY2025, driven by strong export growth and steady domestic sales, while profit after tax declined 5%. The company declared a special fully franked dividend amid ongoing US expansion efforts.
- Sales revenue up 5.3% to $729.9 million
- Net profit after tax down 5% to $97.5 million
- Export sales surged 16.4%, led by US market growth
- Special fully franked dividend of 50 cents per share declared
- Increased investment in US associate ORW and 4 Wheel Parts acquisition
Solid Sales Growth Amid Challenging Conditions
ARB Corporation Limited has delivered a mixed but strategically significant FY2025 result, with sales revenue climbing 5.3% to $729.9 million. This growth was largely fuelled by a robust 16.4% increase in export sales, particularly in the United States, offsetting a flat performance in the Australian aftermarket segment. Despite headwinds including lower new vehicle sales in Australia and inflationary pressures dampening consumer spending, ARB maintained steady domestic sales, demonstrating resilience in a tough market.
Profitability Pressured by Currency and Tariffs
Profit before tax declined 4.6% to $134.9 million, while net profit after tax fell 5% to $97.5 million. The profit contraction reflects several factors – a historically weak Australian dollar against the Thai Baht, the impact of newly introduced US import tariffs on automotive and steel products, and increased costs associated with acquisitions and investments in growth initiatives. Notably, ARB has expanded its US footprint by increasing its stake in ORW USA, Inc. from 30% to 50%, facilitating ORW’s acquisition of 4 Wheel Parts, a major US retailer with 48 stores across nine states.
Strategic Investments and Product Innovation
ARB’s FY2025 was marked by strategic acquisitions including two retail stores in Australia and New Zealand, and MITS Alloy, a Newcastle-based aluminium service body manufacturer. The company also inaugurated a new 4,000 square metre distribution centre in Dubai, enhancing its supply chain capabilities in the Middle East and North Africa. Product innovation remained a priority with launches such as the ARB Brushless Compressor and the Zenith Bull Bar, alongside new accessories for popular vehicle models like the Toyota Prado 250 and US Toyota Tacoma.
Dividend Policy Reflects Confidence
Reflecting confidence in its financial position, ARB declared a special fully franked dividend of 50 cents per share alongside a final dividend of 35 cents per share, bringing total dividends for FY2025 to 119 cents per share, a 72.5% increase from the prior year. The company’s cash reserves stood at $69.2 million with no debt, underpinning its ability to fund ongoing growth initiatives and reward shareholders.
Outlook and Market Position
While acknowledging short-term challenges such as currency volatility and tariff impacts, ARB’s board remains optimistic about long-term growth prospects. The company’s expanding retail network, particularly in the US, combined with a strong pipeline of new products and a healthy order book, position it well to capitalize on global demand for 4x4 accessories. The recent release of new vehicle models like the Toyota Prado and Ford Everest further supports ARB’s outlook for FY2026.
Bottom Line?
ARB’s FY2025 results underscore a strategic pivot towards international expansion and innovation, setting the stage for growth despite near-term profit pressures.
Questions in the middle?
- How will ARB manage ongoing US import tariffs and currency fluctuations impacting profitability?
- What are the integration plans and growth targets for the expanded ORW / 4 Wheel Parts retail network?
- How will new product launches and retail expansions translate into market share gains in FY2026?