Bapcor delivered a slightly above guidance EBITDA for FY26 of $153 million, down 34% year on year. Initiatives at Bapcor are showing early signals of changing fortunes. We have lifted our sales and gross margin forecasts. Our cost and depreciation and amortisation forecasts are also higher.

Bapcor’s trading update revealed ongoing sales declines and a sharp drop in profit margins for 1H26e. The company’s discovery of poor business practices highlights the complexity in the group and the need to simplify. Based on current trends, sales should stabilise in 2H26e and cost savings are likely to trigger a margin recovery. On our estimates gearing will stay below covenant levels and free cash flow should help reduce debt.