Bapcor Limited reported a statutory loss of $104.8 million for the first half of FY26 and announced a fully underwritten $200 million equity raising to strengthen its balance sheet and support operational recovery.
- Statutory loss of $104.8M including $110.3M significant items
- Underlying revenue of $973M, down 2.3% year-on-year
- Proforma net leverage ratio corrected to 1.70 times at 31 Dec 2025
- Fully underwritten $200M equity raising at $0.60 per share
- No interim dividend declared amid operational challenges
Financial Results and Operational Challenges
Bapcor Limited, a leading provider of aftermarket vehicle parts and services in Australia and New Zealand, has released its half-year results for the period ending 31 December 2025. The company reported a statutory loss of $104.8 million, heavily influenced by significant non-cash impairment charges and restructuring costs totalling $110.3 million post-tax. Underlying revenue declined by 2.3% to $973 million, while underlying net profit after tax remained modest at $5.5 million, consistent with prior guidance.
The first half of FY26 proved challenging for Bapcor, with increased competition, cost pressures, and inventory management issues impacting performance. The company also faced a loss of industry knowledge and pricing pressures, particularly in its New Zealand operations, where a $99.9 million impairment was recorded due to deteriorating macroeconomic conditions and margin compression.
Balance Sheet and Capital Management
Amid these headwinds, Bapcor’s net debt rose slightly to $387.3 million, with a net leverage ratio of 3.39 times based on underlying EBITDA. The company secured lender support, including temporary covenant amendments to provide financial flexibility during this period of transition. Notably, Bapcor corrected a typographical error in its outlook, confirming the proforma net leverage ratio post-equity raising at 31 December 2025 is 1.70 times, not 2.13 times as initially stated.
To bolster its balance sheet and enhance resilience, Bapcor announced a fully underwritten $200 million equity raising priced at $0.60 per share; a steep discount of 48.4% to the theoretical ex-rights price and 65% to the last closing price. This capital raise comprises a 1-for-1.36 accelerated non-renounceable entitlement offer and a $50 million pro rata institutional placement, expected to issue approximately 333 million new shares, nearly doubling the existing share count.
Strategic Focus and Outlook
New CEO Chris Wilesmith, in his first six weeks at the helm, emphasised the company’s commitment to rebuilding operational capability and improving customer experience. Initiatives include optimising store networks, enhancing pricing competitiveness, and simplifying internal processes. Early signs of recovery are emerging with positive sales momentum across key segments, including Networks, Retail, and New Zealand.
Looking ahead, Bapcor expects underlying EBITDA for FY26 to range between $150 million and $160 million (post-AASB16), with net leverage anticipated to reduce to approximately 1.2 to 1.5 times by 30 June 2026, supported by targeted cash flow improvements. The company has elected not to pay an interim dividend, reflecting its focus on financial consolidation.
Governance and Reporting Adjustments
Alongside operational updates, Bapcor undertook a detailed balance sheet review that led to restatements of prior period financials, primarily related to the Trade segment and payroll provision adjustments. The company also realigned its segment reporting to better reflect its evolving operating model, with no impact on consolidated results. These measures aim to enhance transparency and support investor confidence as Bapcor navigates its turnaround.
Bottom Line?
Bapcor’s equity raise and operational reset set the stage for a critical recovery phase, but execution risks remain under close watch.
Questions in the middle?
- Will Bapcor’s operational improvements translate into sustained profit growth in 2H26?
- How will the equity raising impact shareholder dilution and market sentiment?
- What is the potential financial impact of the ongoing payroll issue review?