Why Is MaxiPARTS Raising Dividends Despite a Profit Dip?
MaxiPARTS Limited reported a modest 1.8% revenue increase to $139.3 million for the half-year ended December 2025, while net profit after tax dipped slightly by 2%. The company raised its interim dividend to 4.15 cents per share, reflecting confidence in its growth initiatives and cash flow outlook.
- Revenue up 1.8% to $139.3 million
- Net profit after tax down 2% to $3.645 million
- EBITDA stable at $13.9 million with 10% margin
- Interim dividend increased to 4.15 cents, payout ratio raised to 50%
- Growth driven by new Kalgoorlie store and Förch Australia sales expansion
Financial Performance Overview
MaxiPARTS Limited has delivered a steady financial performance for the half-year ended 31 December 2025, with revenues rising 1.8% to $139.3 million compared to the prior corresponding period. Despite this top-line growth, net profit after tax attributable to members declined slightly by 2% to $3.645 million. The company’s EBITDA remained stable at $13.9 million, maintaining a consistent 10% margin, signalling operational resilience amid a competitive market.
Segment Contributions and Growth Initiatives
The revenue growth was supported by both core segments: MaxiPARTS Operations increased revenue by 1.2% to $128.4 million, while Förch Australia posted a stronger 8.8% rise to $11.5 million. The company invested in organic growth programs, including opening a new greenfield retail store in Kalgoorlie, Western Australia, and expanding the sales force within Förch Australia. These initiatives are expected to underpin further revenue and margin improvements in the second half of the financial year.
Cash Flow and Balance Sheet Highlights
Operating cash flow was $7.0 million, translating to a 65% cash conversion rate from EBITDA, down from 88% in the prior period. This reduction reflects increased working capital investments, particularly in inventory to support growth initiatives and key account expansions. Net debt rose modestly to $8.7 million, with a leverage ratio of 0.3, comfortably within the company’s capital management targets. MaxiPARTS holds $28 million in total loan facilities, with $22.5 million drawn, providing ample liquidity for ongoing operations and strategic investments.
Dividend Policy and Shareholder Returns
Reflecting confidence in its financial position and future prospects, MaxiPARTS declared a fully franked interim dividend of 4.15 cents per share, up from 3.05 cents in the previous corresponding period. This increase accompanies a raised payout ratio to 50% of net profit after tax from continuing operations, up from 40% previously. The company’s Dividend Reinvestment Plan remains available at no discount, offering shareholders flexible options to increase their holdings.
Outlook and Strategic Focus
Looking ahead, MaxiPARTS anticipates market conditions to remain broadly consistent with recent trends, including softer transport activity on Australia’s east coast and ongoing pricing pressures. However, the company is optimistic about pockets of stronger performance, particularly in Western Australia and Queensland. Key priorities for the remainder of FY26 include driving revenue and margin growth through the Kalgoorlie store ramp-up, expanding key customer projects, and boosting Förch Australia’s sales force impact. The company also targets improved cash conversion above 80% for the full year and plans to reduce net debt further, potentially enabling higher dividend distributions.
Bottom Line?
MaxiPARTS’ steady half-year results and increased dividend signal cautious optimism as it invests in growth and navigates a competitive market.
Questions in the middle?
- How will the new Kalgoorlie retail store impact full-year revenue and profitability?
- What are the prospects for margin recovery in Förch Australia amid sales force expansion?
- Will MaxiPARTS maintain its elevated dividend payout ratio if market conditions soften?
