NTAW (NTD) H2 2024 earnings summary

Executive summary

• Completed major growth projects, including combining Australian wholesale businesses and launching Dunlop distribution in Australia in April 2024.

• Final warehouse consolidation in Perth finished in November 2023; all businesses now on a unified financial system.

• Management changes include new Group COO, NTAW wholesale CEO, and Black Rubber CEO.

• Operating conditions impacted by low economic growth and weak consumer sentiment, with New Zealand's recession affecting retail revenue.

• Goodyear's exit from the market created new opportunities for the group.

Financial highlights

• FY24 Operating EBITDA rose 9% to $42.3 million (FY23: $38.8 million).

• Revenue declined 8.4% year-over-year to $533.4 million due to a reduced brand portfolio.

• Gross profit margin improved to 31.6% (FY23: 28.1%) from product mix changes and lower costs.

• Operating expenses increased by only 1.7% year-over-year.

• Operating NPATA fell to $6.1 million (FY23: $8.0 million) due to AASB 16 adjustments and higher tax expense.

Outlook and guidance

• Conservative sales growth forecast for FY25, reflecting subdued consumer sentiment and economic conditions.

• Revenue growth expected from a full year of Dunlop sales, new loyalty programs, Black Rubber expansion, and NZ recovery.

• FY25 Operating EBITDA guidance: $47–$50 million (vs. $42.3 million in FY24).

• Capital will be needed for working capital, acquisitions, equipment upgrades, and new warehouse openings.