ARB CORPORATION LIMITED ASX ANNOUNCEMENT
22 February 2022
APPENDIX 4D, CHAIRMAN'S STATEMENT AND FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2021
ARB Corporation Limited herewith lodges:
- Appendix 4D for the half year ended 31 December 2021;
- Chairman's Statement for the half year ended 31 December 2021; and
- Financial Report for the half year ended 31 December 2021.
This announcement was approved for release by the Company Secretary.
Yours Sincerely,
Damon Page
Company Secretary
ARB CORPORATION LIMITED
ABN 31 006 708 756
APPENDIX 4D
FOR THE HALF YEAR ENDED 31 DECEMBER 2021
-
The reporting period is the half year ended 31 December 2021.
The previous corresponding period is the half year ended 31 December 2020. - Results for announcement to the market
Six months ended | Dec 2021 | Dec 2020 | % Change | |
$'000 | $'000 | |||
Sales Revenue | 359,179 | 283,921 | 26.5% | |
2.1 | Revenues from ordinary activities | 360,663 | 285,019 | 26.5% |
Profit from ordinary activities before tax | 91,986 | 72,083 | 27.6% | |
attributable to members | ||||
2.2 | Profit from ordinary activities after tax attributable | 68,911 | 54,002 | 27.6% |
to members | ||||
2.3 | Net profit for the period attributable to members | 68,911 | 54,002 | 27.6% |
2.4 | Interim Dividend | Dec 2021 | Dec 2020 | % Change |
Interim Dividend per Ordinary Share | 39.0 cents | 29.0 cents | 34.5% | |
(fully franked at 30%) |
2.5 Refer to section 5 below for dividend details.
3. | Net tangible assets per security | Dec 2021 | Dec 2020 | % Change |
Net tangible assets per security (including lease right-of-use asset) | $5.71 | $4.89 | 16.8% |
4. There were no changes to controlled entities during the half year ended 31 December 2021.
Franked | ||||||
Amount per | Amount per | Total | Record | Payment | ||
5. | Dividends | Security | Security | $'000 | date | date |
Interim dividend - year ended 30 June 2021 | 29.0 cents | 29.0 cents | 23,448 | 9 Apr 2021 | 23 Apr 2021 | |
Final dividend - year ended 30 June 2021 | 39.0 cents | 39.0 cents | 31,500 | 8 Oct 2021 | 22 Oct 2021 | |
Interim dividend - year ended 30 June 2022 | 39.0 cents | 39.0 cents | 31,853 | 8 Apr 2022 | 22 Apr 2022 |
- A Dividend Reinvestment Plan and Bonus Share Plan will be in operation for the interim dividend. The last date for the receipt of an election notice for participation in the plans is 13 April 2022.
- Details of associates or joint venture entities are not applicable.
- Accounting standards used by foreign entities are not applicable.
- The financial report has been independently reviewed by Pitcher Partners and is not subject to a modified opinion or emphasis of matter paragraph.
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CHAIRMAN'S STATEMENT
The Directors of ARB Corporation Limited ("ARB" or the "Company") are pleased to report that the Company achieved a profit after tax of $68.9 million for the half year ended 31 December 2021. This represents an increase of 27.6% compared with the prior corresponding period.
Net profit before tax of $92.0 million for the half year was also up 27.6% over the December 2020 half year.
Sales for the half year were $359 million, an increase of 26.5% over the prior corresponding period.
The half year results are summarised below:
Six months ended | 31 Dec 21 | 31 Dec 20 | Change |
$'000 | $'000 | ||
Sales revenue | 359,179 | 283,921 | 26.5% |
Other revenue | 1,484 | 1,098 | |
Total revenue | 360,663 | 285,019 | |
Profit before Tax | 91,986 | 72,083 | 27.6% |
Tax expense | (23,075) | (18,081) | |
Profit after Tax | 68,911 | 54,002 | 27.6% |
Earnings per Share (cents) | 84.46 | 67.32 | |
Interim Dividend (cents per share) | 39.00 | 29.00 | 34.5% |
Franking | 100% | 100% |
The Board has declared an interim fully franked dividend of 39.0 cents per share compared with 29.0 cents per share fully franked last year. The increase in the interim dividend represents a modest increase in the dividend payout ratio to 46% compared with 43% last year.
The interim dividend will be paid on 22 April 2022 and the Record Date will be 8 April 2022. The ARB Dividend Reinvestment Plan and Bonus Share Plan (the "Plans") will be in operation for the interim dividend to assist with the funding of ARB's ongoing expansion programme.
Information about the Plans can be found on the Company's website at http:/www.arb.com.au/about/investor-relations. Investors wishing to make or change an election to participate in the Plans can do so online via the Computershare Investor Centre website at www.computershare.com.au/easyupdate/arbor by phoning Computershare on 1300 850 505.
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HIGHLIGHTS OF THE HALF YEAR TO 31 DECEMBER 2021
Sales
The Company's sales for the period grew by 26.5% over the previous corresponding period with growth achieved across all segments of the business.
A summary of sales category performance for the period is as follows:
Customer Category | Percentage of Sales | Sales Growth | |
6 months to Dec 2021 | 6 months to Dec 2020 | ||
Australian Aftermarket | 53.1% | 58.1% | 15.6% |
Exports | 38.4% | 34.7% | 39.9% |
Original Equipment | 8.5% | 7.2% | 50.6% |
100.0% | 100.0% | 26.5% |
Sales to the Australian aftermarket grew by a respectable 15.6%. Sales growth was particularly strong in Victoria despite the extended government-imposed lockdowns during the half year. Sales growth in the other States and Territories was also satisfactory.
ARB's aftermarket sales growth of 15.6% exceeded the 1.7% growth in sales of new vehicles in ARB's target market, which comprises medium to large SUVs and four-wheel drive utilities. This reflects the strength of ARB's distribution network, the continuing trend towards local touring, stock availability and a growing market.
Export sales grew strongly by 39.9% and continue to increase as a proportion of the Company's total sales. Exports now represent 38.4% of the Company's total sales, up from 34.7% in the prior comparative period. Export sales include the addition of Auto Styling Truckman's sales, based in the United Kingdom and acquired in March 2021, for the entire half year with no contribution in the corresponding half year. Key drivers of the strong growth in the export category included sales and distribution operations in the USA, the UK, and the Czech Republic. ARB's growing Thailand operations support logistic efficiencies and volume growth in the export business. ARB New Zealand's operations continue to grow and are an important contributor to the Company's canopy and back of ute strategy.
Sales to original equipment manufacturers ("OEM") increased 50.6% over the period. This significant growth was attributable to the timing of OEMs stocking up in preparation for new vehicle model launches and the addition of new business. The initial order quantities boosted sales part way through the second half of last financial year and during the first half of this financial year. Consequently, sales to OEMs are expected to decline during the second half of this financial year.
In addition, ARB's OEM business is particularly sensitive to changes in new vehicle supply to Australia. The recent, well publicised global shortage of semi-conductors has affected new vehicle supply to global markets. ARB is cautiously watching vehicle deliveries to key markets and managing the business accordingly.
Distribution
The Company distributes through its market leading ARB store network in Australia, to retail customers, ARB stockists, new vehicle dealers and various fleet operators. There are currently 72 ARB stores in Australia, of which 29 are Company owned, up from 69 stores at this time last year.
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Three new independently owned stores opened during the last 12 months located in Sale, Victoria, and in Cockburn and Karratha, Western Australia. All three stores have been fitted out in ARB's flagship style and demonstrate the Company's strong partnership with its independent distributors and their confidence investing in the ARB brand.
A number of new stores are planned to open throughout 2022 and the Company has commenced the relocation and flagship-style upgrade of its stores in Albury, NSW and Launceston, Tasmania.
The Ford Australia License Accessory ("FLA") program commenced during the half year and provides customers with the option of purchasing selected ARB products directly from Ford dealers with the 5-year new vehicle warranty supported by ARB's established distribution network. Ford also announced this program will extend to the new model Ranger and Everest vehicles due for release in mid-2022. ARB is well placed to have accessories ready at launch. The program will be extended to markets outside Australia as the new platforms launch globally.
Products and Production
Product development is a key element to maintaining the Company's long-term competitive advantage. The Company continues to focus on the engineering and development of new products and applications with engineering resources working on a number of long-term product development projects, some of which will be released to market during 2022.
In the last six months ARB's engineering team has been focused on accessory development for the recently released new Land Cruiser 300 Series, as well as the upcoming Ford Ranger and Everest models for which the FLA will be available. ARB also launched an expanded accessory range for models such as the Nissan Navara, Isuzu MUX, Ford Bronco and Mazda BT-50.
Shareholders can learn more about ARB's new product releases via the Company's website at https://www.arb.com.au/latest/news-and-releases/.
The Company has commenced construction of a new engineering and development centre at its Kilsyth head office location in Melbourne, Victoria. The new centre will consolidate the Australian engineering teams and provide new offices and enhanced facilities for product development and other projects.
The construction of ARB's new 36,000 square metre factory in Thailand is progressing on schedule and on budget. The new factory is expected to open towards the end of 2022.
Financial
ARB's growth in profit after tax of 27.6% is broadly in line with the sales revenue growth of 26.5%. The Company, supported by solid customer demand, maintained its sales margins. A stronger Australian dollar, compared with the corresponding period, also assisted the result. The Company is cautiously scaling its operations to accommodate the higher sales levels and notes that operational and supply chain cost pressures will modestly increase the Company's cost base.
Net cash provided by operating activities of $28.6 million during the half year was driven by the profit after tax of $68.9 million, offset by the increase in inventory holdings of $40.5 million. ARB sought to boost inventories in a challenging supply chain environment to facilitate continued sales growth.
The Company retained a cash balance of $58.3 million as at 31 December 2021. The decrease in the cash balance of $26.4 million from the June 2021 financial year end primarily reflects expansionary capital purchases of property, plant and equipment for $27.0 million and dividends paid to shareholders in October 2021 of $25.4 million.
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ARB Corporation Limited published this content on 16 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 August 2022 00:31:09 UTC.
