Citi analyst Sam Teeger has indicated that Bapcor’s first-half results underscore a continuing erosion of shareholder value. The company reported a loss of $104.8 million, significantly below the VA consensus loss of $9.8 million. Bapcor is an automotive aftermarket specialist, providing parts, accessories, equipment, and services. It operates across the Asia Pacific region, serving a diverse range of customers in the automotive repair and maintenance sectors.
Teeger highlighted several significant items impacting Bapcor’s performance, including an approximate $100 million impairment on its New Zealand assets, alongside various other write-offs. In light of the losses, Bapcor did not declare a dividend, falling short of the 1.1 cent per share consensus.
According to Teeger, there is considerable uncertainty surrounding Bapcor’s future direction, citing another earnings downgrade, a recent management change, and a shift in segment reporting. These factors contributed to a substantial discount in the company’s equity raising.
To manage its high leverage, Bapcor is undertaking a $200 million fully underwritten equity raising at 60¢ per share. This represents a 65 per cent discount to the last closing price. The company plans to issue approximately 333 million new shares, which is around 98 per cent of the existing stock on issue. Citi had previously identified gearing as a major concern, noting net leverage at 3.39x at the half-year mark.
