Peter Warren Posts $22.3m Underlying Profit, Declares 5.6c Dividend
Peter Warren Automotive Holdings reported a steady FY25 underlying profit before tax of $22.3 million, maintaining revenue despite a challenging new car market and declaring a final dividend. The group’s strategic focus on cost control, inventory discipline, and acquisitions underpinned its resilience.
- FY25 underlying profit before tax of $22.3 million, matching guidance
- Revenue stable at $2.48 billion despite new car market decline
- Gross margins stabilized at 16.1%, supported by growth in used vehicles and service lines
- Net debt reduced to $46.7 million with disciplined inventory management
- Final dividend declared at 4.0 cents per share, full year total 5.6 cents
Steady Performance Amid Market Challenges
Peter Warren Automotive Holdings Limited (ASX, PWR) has released its FY25 financial results, reporting an underlying profit before tax of $22.3 million, in line with the guidance it provided last month. This outcome is notable given the broader decline in the new car market, which has pressured many automotive retailers across Australia.
Despite these headwinds, Peter Warren managed to keep its revenue largely flat at $2.48 billion, a marginal increase from the previous year. This stability was achieved through a combination of strategic acquisitions and organic growth in higher-margin segments such as used vehicles, service, parts, finance, and insurance.
Operational Discipline and Cost Control
The company’s gross margins stabilized at 16.1%, down slightly from 16.9% in FY24 but reflecting a tough environment for new car sales. CEO Andrew Doyle highlighted the benefits of a disciplined inventory management program, which saw new vehicle stock reduced significantly, helping to mitigate holding costs and interest expenses.
Operating expenses rose by $6.1 million to $289.7 million, largely driven by $12.5 million in acquisition-related costs. Excluding acquisitions, the company actually reduced expenses in key areas such as headcount, commissions, and insurance, underscoring the effectiveness of its cost-out initiatives.
Strategic Expansion and Brand Diversification
Peter Warren expanded its footprint in the Chinese-brand dealership segment, growing from two locations in FY24 to nine in FY25, with plans to reach at least 14 in the coming year. This diversification aligns with the group’s strategy to broaden its brand portfolio and capture emerging market opportunities.
The group also completed acquisitions in Macarthur, NSW, and other locations, positioning itself as a potential consolidator in the fragmented dealership sector. However, management emphasized a disciplined approach to future acquisitions, focusing on sustainable earnings and shareholder returns.
Dividend and Outlook
Reflecting confidence in its financial position, Peter Warren declared a fully franked final dividend of 4.0 cents per share, bringing the total dividend for FY25 to 5.6 cents. The company’s balance sheet remains robust, supported by $229 million in owned property and a reduced net debt of $46.7 million.
Looking ahead to FY26, the group plans to leverage innovation and a customer-centric culture to drive organic growth, while continuing to pursue selective acquisitions. Although the new car market is expected to remain competitive, Peter Warren anticipates growth in higher-margin service and aftermarket segments, aiming to improve earnings despite ongoing industry challenges.
Bottom Line?
Peter Warren’s disciplined strategy and diversified growth avenues set the stage for navigating a competitive FY26 automotive market.
Questions in the middle?
- How will Peter Warren’s acquisition strategy evolve amid rising interest costs?
- Can growth in used vehicles and service lines offset continued pressure on new car sales?
- What innovations will the group prioritize to enhance its customer-centric culture?
