ARB Corporation Limited reported a 5.3% increase in FY25 sales revenue to A$729.9 million, driven by strong export growth and strategic US market moves, despite a 5% dip in profit after tax.
- FY25 sales revenue up 5.3% to A$729.9 million
- Profit after tax declined 5.0% to A$97.5 million
- Export sales grew 16.4%, led by US and international markets
- Significant investments in manufacturing automation and new product development
- Strong cash position with no debt and fully franked dividends
Solid Sales Growth Despite Challenging Conditions
ARB Corporation Limited closed FY25 with a commendable 5.3% increase in sales revenue, reaching A$729.9 million. This growth was achieved despite a backdrop of subdued new vehicle sales in Australia and cautious consumer spending. The company’s Australian aftermarket segment remained robust, accounting for over half of total sales, while export markets delivered double-digit growth, underscoring ARB’s expanding global footprint.
Profitability Pressured by Currency and Inventory Factors
Profit after tax fell 5.0% to A$97.5 million, influenced by higher effective tax rates, currency headwinds, and inventory management challenges. The company experienced volatility in profits between the first and second halves of the year due to fluctuations in factory overhead recoveries linked to inventory levels. Despite these pressures, ARB maintained a strong balance sheet with net cash holdings of A$69.2 million and zero debt, positioning it well for future investments.
Strategic Expansion in the US and Manufacturing Automation
ARB’s US operations were a standout performer, with sales growing 21.4% supported by the acquisition and integration of 4 Wheel Parts stores and the Off Road Warehouse joint venture. The company’s investment in a new US engineering center and enhanced eCommerce capabilities is accelerating product localization and market responsiveness. Concurrently, ARB invested heavily in manufacturing automation both in Australia and Thailand, including new equipment and a semi-automated coating line, to boost efficiency and product innovation.
Product Development and Market Diversification
FY25 saw the release of over 350 new products, including localized offerings for the US market and compliance-adapted models like the Earth Camper for the USA. The company also strengthened its OEM pipeline with projects underway for Toyota and other manufacturers, anticipating a recovery in OEM sales in the second half of FY26. The Ford Licensed Accessory program continued to expand, notably with new product lines for the Ford Superduty, enhancing ARB’s presence in key vehicle segments.
Outlook and Strategic Priorities
Looking ahead, ARB expects stable aftermarket sales in Australia and New Zealand, continued export growth, and a rebound in OEM revenues in H2 FY26. The company is actively managing inventory levels to improve cash flow and mitigate margin pressures from foreign exchange fluctuations. With a strong management team and a clear focus on innovation, retail expansion, and strategic partnerships, ARB is well-positioned to navigate ongoing market challenges and capitalize on growth opportunities.
Bottom Line?
ARB’s FY25 results highlight resilience and strategic growth, but currency and inventory dynamics warrant close watch as FY26 unfolds.
Questions in the middle?
- How will ARB’s US expansion impact profitability and market share in the medium term?
- What is the expected timeline and impact of new OEM projects on revenue recovery?
- How will ongoing foreign exchange headwinds influence ARB’s margins and pricing strategies?