Eagers Automotive Maintains Dividends Amid Strategic Shift on Reinvestment Plan
Eagers Automotive has reported a robust first half of 2025, with revenue climbing nearly 19% and net profit rising 8.8%, while maintaining its interim dividend at 24 cents per share.
- Revenue increased 18.9% to AUD 6.5 billion
- Net profit after tax rose 8.8% to AUD 134.2 million
- Interim dividend maintained at 24.0 cents per share, fully franked
- Strong balance sheet with AUD 1.08 billion liquidity and manageable net debt
- No impairment indicators on goodwill or intangible assets
Solid Financial Performance Amid Market Challenges
Eagers Automotive Limited (ASX – APE) has delivered a strong set of results for the half year ended 30 June 2025, underscoring its resilience in the competitive automotive retail sector. The company reported revenue of AUD 6.5 billion, an 18.9% increase compared to the same period last year, driven primarily by growth in its core Car Retailing segment.
Net profit after tax rose by 8.8% to AUD 134.2 million, reflecting effective cost management and operational efficiencies despite ongoing market headwinds. Earnings per share increased to 46.4 cents, signaling solid returns for shareholders.
Dividend Policy and Shareholder Returns
The Board has declared a fully franked interim dividend of 24.0 cents per share, unchanged from the prior year, payable on 1 October 2025. Notably, the company’s dividend reinvestment plan (DRP) will not apply to this interim dividend, a move that may influence shareholder participation strategies.
This steady dividend reflects Eagers Automotive’s confidence in its cash flow generation and balance sheet strength, even as it navigates a dynamic automotive market.
Balance Sheet and Liquidity Position
The company’s financial position remains robust, with net current assets of AUD 16.3 million and total liquidity of AUD 1.08 billion, comprising AUD 461.9 million in cash and AUD 616 million in undrawn credit facilities. Corporate debt net of cash stands at a manageable AUD 474.2 million.
Eagers Automotive continues to comply with all bank covenants and forecasts ongoing compliance for at least the next 12 months, supporting its classification as a going concern.
Segment Performance and Asset Valuations
The Car Retailing segment remains the primary revenue driver, offering a diversified portfolio including new and used vehicles, parts, and after-sales services. The Property segment, focused on commercial real estate supporting dealership operations, reported stable asset valuations with no impairment indicators on goodwill or intangible assets.
The company completed the divestment of all shares in listed companies during the period, reflecting a strategic shift in its financial asset portfolio.
Outlook and Strategic Considerations
While the results demonstrate solid momentum, the suspension of the DRP for the interim dividend raises questions about capital allocation priorities. The company’s ability to sustain growth amid evolving consumer preferences and supply chain dynamics will be closely watched by investors.
Bottom Line?
Eagers Automotive’s strong half-year results set a confident tone, but the suspension of its dividend reinvestment plan signals a strategic pivot worth monitoring.
Questions in the middle?
- What is the rationale behind suspending the dividend reinvestment plan for this interim dividend?
- How will Eagers Automotive leverage its strong liquidity to navigate potential market disruptions?
- What are the growth prospects for the Property segment amid changing commercial real estate dynamics?