RPM Automotive Group Limited has reported a challenging first half of FY2026, with revenue down 11% and a net loss of $1.62 million. The company cites macroeconomic pressures and slower progress on new initiatives as key factors.
- Revenue declined 11% to $53.47 million
- Net loss after tax of $1.62 million versus prior profit
- EBITDA positive at $2.5 million but down from previous year
- No dividends declared for the half-year
- Slower-than-expected rollout of Tyre Recycling Project and wholesale expansion
Revenue and Profitability Under Pressure
RPM Automotive Group Limited has released its half-year results for the period ending 31 December 2025, revealing a notable downturn in financial performance. Revenue fell by 11% to $53.47 million, reflecting the impact of ongoing macroeconomic headwinds across the automotive aftermarket sector. The company recorded a net loss after tax of $1.62 million, a sharp reversal from the prior corresponding period's profit of $1.25 million.
Despite the loss, RPM reported a positive EBITDA of $2.5 million, though this was down from $2.52 million a year earlier. The decline in earnings before interest, tax, depreciation, and amortisation underscores the pressures on operational profitability amid challenging trading conditions.
Operational Challenges and Project Delays
The company attributed the weaker performance to a combination of reduced sales volumes and a contraction in gross margins. Additionally, RPM highlighted slower-than-anticipated progress on key growth initiatives, particularly its Tyre Recycling Project and the expansion of its wholesale product range. These projects, intended to drive organic growth, have yet to deliver the expected financial benefits within the half-year timeframe.
RPM's management acknowledged the difficult environment but expressed confidence in an improving outlook for the second half of FY2026. They anticipate that easing macroeconomic pressures and the maturation of new projects will contribute to a rebound in financial results.
Balance Sheet and Capital Management
The balance sheet shows net debt of approximately $28 million, with total borrowings of $32 million partially offset by cash reserves of $3.9 million. The company maintained its capital structure without issuing dividends, reflecting a cautious approach given the current financial performance. No dividend reinvestment plan is in place, and the board declared no interim or final dividends for the period.
RPM also completed the acquisition of Universal Tyres Australia during the half-year, although the accounting for this transaction remains provisional. The acquisition is expected to complement RPM’s existing operations, though it contributed a modest loss before tax in the reporting period.
Governance and Outlook
The board remains stable with no changes reported during the half-year. The company reported no audit disputes or qualifications, maintaining transparency and compliance with Australian accounting standards. Management’s focus remains on navigating the current market challenges while positioning RPM for growth as trading conditions improve.
Investors will be watching closely for updates on the progress of the Tyre Recycling Project and wholesale expansion, as well as any signs of margin recovery in the core automotive aftermarket segments.
Bottom Line?
RPM’s half-year loss underscores short-term challenges, but new projects and market recovery could turn the tide in H2 FY2026.
Questions in the middle?
- How quickly can RPM accelerate the rollout and profitability of its Tyre Recycling Project?
- What impact will the Universal Tyres Australia acquisition have on future earnings?
- Will improving macroeconomic conditions translate into sustained revenue growth in the second half?