MaxiPARTS Delivers 13% Profit Growth and Raises Dividend on Strong Cash Flow

Profit and Revenue Growth Despite Market Headwinds

MaxiPARTS Limited (ASX:MXI) reported a solid 13% increase in net profit after tax to $8.7 million for the year ended 30 June 2026, on the back of a 3% rise in revenue to $274.4 million. The company’s EBITDA grew 5.7% to $28.8 million, lifting margins to 10.5% from 10.2% the previous year. This performance comes despite challenging conditions in the second half, notably market disruption linked to the Iranian conflict and diesel price volatility in March 2026.

Revenue growth was driven by organic initiatives, including the successful launch of a new retail site in Kalgoorlie, Western Australia, and expansion projects with key customers, particularly in Queensland. The company’s focus on pricing discipline, margin management, and cost control helped sustain profitability and improve EBITDA margins.

Segment Performance Highlights

The MaxiPARTS Operations segment, which distributes commercial vehicle parts across Australia, saw revenue increase 2.1% to $252 million. EBITDA rose 6.4% to $26.2 million with margins expanding to 10.4%, reflecting a favourable product mix and cost efficiencies despite higher freight costs from rising diesel prices.

Förch Australia, the distributor of workshop consumables, grew revenue nearly 10% to $23.5 million, maintaining higher EBITDA margins than the core MaxiPARTS business despite a slight dip in absolute EBITDA to $2.6 million. The segment invested in sales team expansion and operational support, including warehouse consolidation and a Brisbane facility upgrade, positioning it for continued double-digit growth.

Cash Flow Strength and Balance Sheet Improvement

MaxiPARTS generated a robust operating cash flow of $29.8 million, representing a cash conversion rate of 116%, up from 84% in the prior year. This improvement was supported by a targeted inventory optimisation program that reduced stock by $5.4 million, even with the new Kalgoorlie store opening and revenue growth. Debtor management remained disciplined throughout.

The company ended the year with a net cash position of $7.0 million, a $14.2 million turnaround from a net debt position of $7.2 million at June 2025. This stronger balance sheet provides flexibility for increased dividends and funding growth initiatives. MaxiPARTS fully repaid $6 million of borrowings during the year, drawing down $16.5 million on its $28 million loan facility maturing in 2028.

Dividend Policy Lifted and Executive Remuneration Aligned to Performance

The board declared a fully franked final dividend of 5.46 cents per share, representing a 75% increase on the prior year’s final dividend and bringing the full-year payout to 9.61 cents per share, up 56%. The dividend payout ratio increased progressively from 40% to 60% of net profit after tax during FY26. The dividend reinvestment plan was suspended for the final dividend.

Executive remuneration remains closely tied to company performance, with short-term incentives linked to profit, cash flow, and safety targets. The long-term incentive program is based on earnings per share (EPS) growth hurdles, with the FY24 performance rights lapsing due to not meeting the 10% annual EPS growth target. The Managing Director’s total remuneration package includes a 50% allocation to performance rights, underscoring the focus on sustainable shareholder value creation.

Outlook Amid Uncertainty

While acknowledging ongoing macroeconomic uncertainties, including inflation, interest rates, and geopolitical tensions, MaxiPARTS remains confident in its growth strategy. Key drivers for FY27 include a full year of trading from the Kalgoorlie site, continued double-digit growth in the Japanese parts program and Förch Australia, network expansion, and margin improvement initiatives through pricing and supplier negotiations. The company also aims to sustain recent working capital gains and increase capital returns while exploring organic and inorganic growth opportunities.