Amotiv Limited posted a resilient half-year result for December 2025, balancing modest revenue growth and margin pressures with strong cash flow and shareholder returns.
- 3.3% revenue growth amid challenging 4WD and lighting markets
- Underlying EBITA up 1.3%, supported by pricing actions and cost efficiencies
- Statutory net profit after tax surged 39.4% due to lower significant items
- Interim dividend increased 8.1% to 20 cents per share
- Completed 5% share buyback, maintaining leverage within target range
Solid Growth Despite Sector Headwinds
Amotiv Limited has delivered a steady half-year performance for the six months ending December 2025, reporting a 3.3% increase in revenue to $520.5 million. This growth was driven by new business wins, ongoing product development, and geographic diversification, even as the company faced softness in its 4WD Accessories and Lighting, Power & Electrical segments.
Underlying earnings before interest, tax and amortisation (EBITA) edged up 1.3% to $98.3 million, reflecting margin pressures primarily in the 4WD segment due to domestic inflation and product mix challenges. However, pricing increases implemented during the period are expected to support margin recovery in the second half of the financial year.
Amotiv Unified Program Eases Cost Pressures
The company’s Amotiv Unified initiative played a pivotal role in partially offsetting margin compression caused by inflation. Operational efficiencies and cost reductions, particularly in the Lighting, Power & Electrical segment where operating costs fell by over 12%, contributed to a 9.4% increase in underlying EBITA for that division. Amotiv Unified is also expected to deliver further incremental benefits as the fiscal year closes.
Despite a 15.2% decline in EBITA within the 4WD Accessories & Trailering segment, largely due to delayed price increases and a one-off $1 million doubtful debt provision, the segment saw revenue growth of 5.5%, bolstered by the full inclusion of South African operations and new original equipment (OE) contract wins. Notably, the company is preparing to commence supply for the Toyota Hilux in the second half, signaling potential for future growth.
Strong Cash Flow and Shareholder Returns
Amotiv’s disciplined capital management underpinned a robust cash conversion rate of 91.9%, a significant improvement over the prior period. The company returned approximately $48 million to shareholders through dividends and a completed 5% share buyback, which cost around $66.9 million. Basic earnings per share rose sharply by 45%, driven by lower significant items, while underlying earnings per share increased 5.3%.
The board declared an interim dividend of 20 cents per share, up 8.1% from the previous corresponding period, maintaining a payout ratio of 52% in line with company targets. Leverage remains comfortably within the target range, with a net debt to EBITDA ratio of 1.95 times, despite an increase due to working capital and buyback activity.
Outlook – Cautious Optimism Amid Market Challenges
Looking ahead, Amotiv reaffirmed its full-year guidance, anticipating group revenue growth and underlying EBITA of approximately $195 million. The company expects margin improvements in the second half, supported by pricing actions and operational efficiencies. While the 4WD segment faces softer new vehicle sales, and the Lighting, Power & Electrical segment anticipates continued subdued conditions in Australia and New Zealand, the Powertrain & Undercarriage segment’s wear and repair categories are expected to remain resilient.
Investment in the electric vehicle business continues to be moderated, with a path to break even by the end of FY27 on a run-rate basis. The Amotiv Unified program is projected to deliver an incremental $10 million in annualised gross benefits by the end of FY26, underscoring the company’s focus on sustainable cost management and growth.
Bottom Line?
Amotiv’s steady half-year performance and disciplined capital strategy set the stage for cautious optimism as it navigates ongoing inflation and market softness.
Questions in the middle?
- How will Amotiv’s pricing strategy evolve if inflationary pressures persist beyond FY26?
- What impact will the launch of Toyota Hilux supply have on 4WD segment margins in the second half?
- Can the electric vehicle business achieve break-even as projected amid shifting market dynamics?