Why Did Autosports Group’s Profit Plunge 46% Despite Revenue Growth?

Revenue Growth Masks Profit Pressure

Autosports Group Limited (ASG) has reported an 8.2% increase in revenue for the year ended 30 June 2025, reaching $2.86 billion. However, this top-line growth belies a significant 46% decline in profit after tax, which fell to $32.9 million from $60.9 million the previous year. The divergence highlights the challenges the automotive retail group faced in translating sales into earnings amid rising costs and strategic investments.

Acquisition and Amortisation Impact Earnings

The company’s profit was notably affected by acquisition-related expenses and intangible asset amortisation. ASG completed the acquisition of B S Stillwell Motor Group Pty Ltd in October 2024, expanding its dealership network. While this move positions the group for future growth, the immediate financial impact included acquisition costs of $3.6 million and amortisation charges of $4.7 million. These non-cash and one-off expenses weighed heavily on reported earnings, partially offset by a $5.7 million reversal of impairment on property, plant, and equipment.

Dividend Maintained Despite Profit Decline

In a signal of confidence, Autosports Group declared a final dividend of 4.5 cents per share, fully franked, to be paid in November 2025. This follows an interim dividend of 3.5 cents paid earlier in the year. The dividend policy suggests management’s commitment to returning value to shareholders despite the profit contraction, though the sustainability of this payout amid ongoing acquisition integration remains a key consideration.

Balance Sheet and Net Tangible Assets

Net tangible assets per share declined further into negative territory, from -24.31 cents to -44.73 cents. This deterioration reflects the increased lease liabilities and intangible assets on the balance sheet, common in dealership groups with significant property and lease commitments. Investors will be watching how these balance sheet dynamics evolve as the group digests its recent acquisition and manages capital structure.

Outlook and Market Positioning

Autosports Group’s FY2025 results paint a picture of a company in transition. Revenue growth and strategic acquisitions indicate ambition and market confidence, but the sharp profit decline underscores the cost pressures and integration challenges ahead. The unmodified audit opinion provides assurance on the financial reporting, yet the next phase will test management’s ability to convert scale into sustainable profitability.