Discontinued Units and Goodwill Hits Cloud RPM Automotive’s Profit Outlook
RPM Automotive Group reported a 5% revenue decline and an 8% drop in net profit from continuing operations for FY25, while launching a pioneering tyre recycling program aimed at sustainable growth.
- 5% decrease in revenue to $112.1 million
- 8% decline in net profit from continuing activities to $4.6 million
- Discontinued business unit caused $3 million loss and $2.5 million goodwill impairment
- Tyre recycling program launched leveraging existing distribution network
- Focus on wholesale division profitability and geographic expansion in FY26
Financial Performance Overview
RPM Automotive Group’s fiscal year ended 30 June 2025 was marked by a modest contraction in revenue and profitability amid challenging economic conditions. The company reported revenue of $112.1 million, down 5% from the previous year, alongside an 8% decrease in net profit from continuing operations to $4.6 million. Despite these declines, RPM managed to improve its gross profit margin by 2%, reflecting a strategic emphasis on procurement and more profitable business lines.
Operating costs were tightly controlled, even slightly reduced, which contributed to a 5% increase in operating profit. However, the discontinuation of one business unit in the first half of FY25 led to a $3 million loss and a significant $2.5 million goodwill impairment, which weighed heavily on the overall net profit after tax, reducing it to $1.7 million.
Strategic Initiatives and Operational Resilience
RPM’s management framed FY25 as a year of consolidation and resilience, navigating inflationary pressures and cost-of-living challenges that impacted retail segments. The company’s response included divesting non-core and underperforming assets and launching a tyre recycling program in the second half of the year. This initiative leverages RPM’s established wholesale and retail infrastructure to repurpose tyres that would otherwise contribute to landfill waste, positioning the company at the intersection of environmental responsibility and organic growth.
The tyre recycling program, initially rolled out in Victoria, is planned to expand into Queensland and New South Wales, signaling RPM’s commitment to sustainable practices and innovation within the automotive sector.
Outlook and Growth Focus for FY26
Looking ahead, RPM is prioritizing enhanced returns from its wholesale division by refining product and service offerings and pursuing controlled geographic expansion. The company has invested in experienced personnel to maintain momentum and build on its solid foundation. While no new acquisitions were made during FY25, RPM’s recent purchase of Chapel Corner Tyres underscores its strategic approach to growth.
RPM’s leadership remains cautiously optimistic, acknowledging the challenges ahead but confident in the company’s ability to deliver sustainable shareholder value through operational discipline and innovative programs like tyre recycling.
Bottom Line?
RPM’s FY25 results reveal a company in transition, balancing short-term setbacks with bold sustainability initiatives that could redefine its growth trajectory.
Questions in the middle?
- How will the tyre recycling program impact RPM’s profitability and market positioning in the coming years?
- What are the specific plans and timelines for geographic expansion in the wholesale division?
- How will RPM manage the financial and operational risks associated with discontinued operations and goodwill impairments?
