Bapcor Faces Profit Pressure and Board Shakeup Amid Restructuring

Financial Performance Overview

Bapcor Limited, a leading automotive aftermarket parts and services supplier across Australia and New Zealand, released its FY25 financial results showing a mixed performance amid ongoing operational transformation. Statutory revenue declined by 3.0% to $1.98 billion, reflecting challenging market conditions and segment-specific headwinds. Pro-forma net profit after tax (NPAT), which excludes significant one-off items, fell 8.4% to $80.4 million compared to FY24.

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) also saw a 4.1% decrease on a pro-forma basis, underscoring the impact of restructuring and competitive pressures, particularly in the Specialist Wholesale, Retail, and New Zealand segments.

Debt Refinancing and Capital Structure

In a strategic move to strengthen its financial position, Bapcor successfully refinanced $170 million of debt facilities originally due in July 2026. The refinancing introduced three new tranches with staggered maturities in July 2029, 2030, and 2031, extending the company’s debt maturity profile and providing greater financial flexibility. Total debt facilities now stand at $820 million, supported by a syndicate of major lenders including ANZ, Westpac, NAB, Citi, SMBC, and MetLife.

Pro-forma net debt at 30 June 2025 was $364.8 million, representing a leverage ratio of 2.13 times pro-forma EBITDA, comfortably within banking covenant limits. This refinancing is expected to support Bapcor’s ongoing investment in digital transformation and operational simplification.

Operational Restructuring and Segment Performance

During FY25, Bapcor undertook significant operational changes aimed at simplifying its business and improving customer focus. These included the closure of 23 smaller warehouses and consolidation into major distribution centres, the rationalisation of the Specialist Networks and Wholesale businesses, and network optimisation involving branch closures and relocations.

These initiatives delivered $27.5 million in cost savings but caused disruption in some segments, notably Specialist Wholesale and Retail, which experienced revenue declines of 3.2% and 3.5% respectively. The Trade segment bucked the trend with a 1.3% revenue increase and a 5.4% rise in EBITDA, driven by effective cost management and price increases. The New Zealand segment faced ongoing economic challenges and increased competition, resulting in a 3.2% revenue decline and 13.2% EBITDA decrease.

Leadership and Governance Changes

FY25 saw notable leadership transitions. Angus McKay was appointed Executive Chair and CEO in August 2024, bringing over 30 years of executive experience. The company also appointed Kim Kerr as CFO in May 2025, succeeding George Saoud who resigned earlier in the year.

In July 2025, three Non-Executive Directors, Mark Bernhard, Brad Soller, and James Todd, resigned, accelerating a board refresh process already underway. Mark Powell was appointed Chair of the Audit and Risk Committee, with Kathryn Spargo and Jacqueline Korhonen joining as members. These changes signal a renewed focus on governance and strategic oversight.

Dividend and Shareholder Returns

The Board declared a fully franked final dividend of 5.5 cents per share, payable on 25 September 2025, bringing total FY25 dividends to 13.5 cents per share, down from 15.0 cents in FY24. The dividend payout represents 57% of pro-forma NPAT, reflecting a balanced approach to returning capital while preserving funds for strategic investments.

Looking Ahead

Bapcor’s five-year strategy focuses on network optimisation, supply chain integration, customer centricity, digitalisation, store fitness, and simplification. While FY25 results were impacted by restructuring and market challenges, management remains committed to stabilising the business and driving sustainable growth. Investors will be watching closely how the company executes its strategy amid evolving automotive aftermarket dynamics, including the rise of electric and hybrid vehicles.