Bapcor reported a 4% decline in EBITDA for FY25. The decline in both the Trade and NZ division’s profit margins was notable in the second-half. We expect the company to have another decline in sales for 1H26e given some store closures and a more competitive environment in Australia and NZ. The NZ segment’s margins look to be resetting lower following a COVID-19 peak. Even so, margins are still healthy relative to peers. The company’s indication that profit will skew to 2H26e is vague. The shape of earnings suggests the profit recovery begins in FY27e.

The more alarming features of Bapcor’s trading update are the rapid deterioration in sales and immediate departure of three board members. While somewhat “glass half-full” we interpret the FY25e trading update as more a “clean out” of the financials and a reset. Management targets over FY25e to FY30e will be easier to achieve.

Bapcor reported 1H25 underlying sales up 0.3% and EBITDA of $132 million, down 8%. Sales have started the second half up slightly. The full year cost saving guidance for $20 to $30 million has been reiterated and will lead to lower total costs in 2H25e, supportive of an improvement to EBITDA. Bapcor will host a Strategy Day in late April 2025 at which the new CEO will provide more clarity on the strategic direction.