Bapcor (BAP) Trading update summary

Business and Trading Performance

• Sales momentum improved across all segments from February to April 2026, reversing previous declines seen from July 2025 to January 2026 versus the prior comparative period.

• Market share is increasing broadly across trade businesses, with gains attributed to customers returning to larger, more stable organizations, and the trade segment achieved market share growth in Parts in 2H26 compared to 1H26.

• Customer retention and engagement are improving, with declining turnover rates, high-quality team members returning, and leadership programs reintroduced.

• Retail and network segments delivered like-for-like sales growth and positive momentum from January to April 2026.

• New Zealand segment saw a turnaround to positive sales growth in February to April 2026 after previous declines.

Financial Guidance, Margin, and Position

• FY26 underlying EBITDA guidance was downgraded to $144M–$150M (post AASB16) and $62M–$68M (pre AASB16), driven by slower sales, margin pressures, increased fuel, freight, and supplier costs, and FX impacts.

• Gross margin is weaker than anticipated due to the pace of price rollbacks and less effective offsetting actions in higher-margin categories.

• Unaudited net debt at end of April 2026 was approximately $168 million, with leverage expected to be higher but within covenant limits; FCCR is forecasted to be compliant at 1.4x.

• Working capital position is improving, with reductions in overdue debtors and improved in-stock availability, though some benefits of inventory reduction initiatives are expected to be deferred into FY27.

• Potential for a non-cash impairment to be assessed at year-end.

External Impacts and Market Conditions

• Trading conditions deteriorated since late March 2026 due to the Middle East conflict and rising interest rates, impacting consumer sentiment and discretionary spending.

• Softer trading conditions, higher fuel, freight, and supplier costs, and NZD depreciation are expected to impact results through FY26.