Peter Warren Automotive Holdings (PWR) H1 2025 earnings summary

Executive summary

• Revenue for H1 FY2025 was AUD 1.23 billion, up 2.2% year-over-year, driven by growth in used cars, service, parts, finance, and acquisitions, though like-for-like sales declined 4.3%.

• Underlying profit before tax was AUD 7.1 million, within guidance but down 79.4% year-over-year due to new car oversupply and margin pressure.

• Management focused on cost-out programs, inventory management, and growth in high-margin after-sales segments.

• Interim dividend declared at AUD 0.016 per share, fully franked, payable 26 March 2025.

• Margins and profitability were pressured by industry oversupply and weaker new car demand, partially offset by growth in used cars, service, and parts.

Financial highlights

• New car revenue declined 9.1% year-over-year due to market oversupply, while used vehicle revenue rose 7.5%.

• Service revenue grew 10.2%, and parts revenue increased 4.3% in the half.

• Gross margin declined by AUD 13.3 million, mainly from a AUD 29.3 million reduction in new car gross profit; gross margin for H1 FY2025 was 16.1%, down 1.5ppts year-over-year.

• Operating expenses increased due to acquisitions but declined on a like-for-like basis due to cost-out initiatives; OpEx as a percentage of revenue was 12% for the December 2024 half.

• Operating cash flow was AUD 29.2 million after floor plan interest; CapEx was AUD 6.8 million, higher due to dealership expansions.

Outlook and guidance

• No significant near-term improvement in market conditions expected; management actions are anticipated to offset further margin declines.

• PBT margins are expected to hold steady in the second half, with ongoing cost initiatives and inventory management.

• Medium-term focus remains on growth through industry consolidation, accretive M&A, and leveraging scale.

• Expansion opportunities, including greenfield sites and acquisitions, will be pursued selectively based on strategic fit and returns.