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ARB - ARB CORPORATION LIMITED.


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  • 12 years later...

now code ARB (& not a post since 2004 when it was mid $3's)

 

now $18 - just a good steady boring value-add stock

 

ARB Corporation Limited (ARB) designs, manufactures, distributes and sells four-wheel drive vehicle accessories and light metal engineering works with manufacturing plants in Victoria, Australia and Rayong, Thailand. ARB has a warehouse and sales centre located in Australia, Thailand and USA, as well as distributors in over 100 countries worldwide.

 

- they handled the move to Asia, and then global expansion, quite well; integrated with the producers, their accessories are at the pointy end of development and adaption.

 

Solid reputation, but a perennial high PE stock (fine until it disappoints). No debt, kept margins 20+% every year. Lifts sales, lifts earnings, lifts dividends every year.

 

and listing today at 12.30 ........... Automotive Solutions Group (code:4WD)

... established in 2016 to aggregate eight businesses associated with the manufacturing, supply and fitting of four-wheel drive (4x4/SUV) aftermarket parts and accessories. Upon completion of the IPO, the Company will operate 11 sites and will employ approximately 180 staff.

 

The Initial Portfolio operates in the Australian 4x4/SUV aftermarket automotive manufacture and retail industries.

 

The initial business acquisitions will set the platform for establishing an alliance of businesses with significant market volume and coverage, supplying components and accessories to the private four-wheel drive and fleet vehicle markets.

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  • 2 years later...
  • 1 year later...

Matthew Kidman (Livewire Markets): Gary, it has been around forever. Been a super stock ARB. Buy, hold, or sell?

Gary Rollo (Montgomery Investments): ARB is a sell for us. Look, it is super high quality. Whenever you mention quality in small caps, ARB jumps into mind, so it is a premier league type stock. The problem is opportunity. At 19 times EBITDA and a business model that is capable of delivering mid single digit type growth, you are paying a lot for that quality. So, Liverpool type quality, but Tranmere Rovers type of opportunity .... so pass that one on.

 

Matthew Kidman (Livewire Markets): Chris, while we're in lockdown in COVID, nothing better than ripping off the old bumper bar and putting on a new one, a few floodlights. ARB. Buy, hold, or sell?

Chris Stott (1851 Capital): Buy, Matthew. So, one of the strongest results we saw at reporting season, they called out a record order book in their history. They are actually struggling to keep up with demand at the moment out of their Thailand facility, and also Kilsyth and Melbourne. So, a really strong balance sheet, great management team, really leveraged to that interstate travel thematic over the next six to 12 months. So buy.
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  • 9 months later...

ARB advises that it achieved unaudited sales revenue of $623 million for the financial year ended 30 June 2021 which represents growth of 33.9% compared with the prior year. Based on preliminary, unaudited management accounts, the Company's profit before tax for the financial year is within the range of $145 million to $150 million.

The Company maintains a positive short-term outlook based on its consistently strong customer order book. ARB is focused on managing input costs and global supply chain pressures whilst pursuing various market opportunities.

 

The current pandemic and economic conditions remain very uncertain and it is not possible to provide financial or operational guidance beyond the short term.

---- and up 8% to $45... (was $20 a year ago and $30 at the last 6 month update)

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  • 1 month later...

With overseas travel banned, cashed up households are spending up on the latest accessories for their 4WD vehicles and utes, while the company has also branched out into making fire pits for camping and the backyard (with BlueScope steel).

 

Net profit after tax climbed 97 per cent to $113 million in the 12 months ended June 30, with sales revenue rising by 34 per cent to $623 million. ARB lifted its final dividend to 39¢ a share, up from 21¢ a year ago.

Chairman Roger Brown said demand was still robust but uncertainty was rising as the world battles the delta variant of COVID 19, and it was simply too hard to make any profit forecasts for the year ahead. ARB will wait instead until its annual meeting on October 14 before it gives any trading update.

ARB acquired a business in the United Kingdom called Truckman in March which makes canopies and bed liners for the rear of utes and 4WD vehicles. Export sales across ARB to countries including New Zealand, the US, the Czech Republic and the United Arab Emirates rose by 50 per cent last year and now make up 37 per cent of total sales.

 

ARB has a network of 70 retail stores in Australia, after opening three new outlets in the past year in Gosford in NSW, Cockburn in Western Australia and Edwardstown in suburban Adelaide.

 

Sales of products and equipment in the Australian aftermarket rose 21 per cent and make up 55 per cent of overall sales.

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  • 1 month later...

A collaboration between ARB and automotive giant Ford for the Ford Bronco model in the US is a potentially golden moment for the company.

 

ARB has been developing a full suite of after market accessories for the Bronco for sale around the globe. It was one of only three companies invited in by Ford to be a supplier for that program.

 

An analyst expects the Ford Bronco collaboration could generate twice the forecasts for revenues from the original equipment manufacturing segment, with better margins and an important fillip for the ARB brand on the global stage.

 

However, one element that all players in the automotive sector and wider industry generally have to grapple with at the moment is a sharp spike in shipping costs and disruptions in supply chain deliveries because of temporary COVID 19 outbreaks at some ports in China, and the knock on effects to the logistics sector.

That supply chain disruption injects sequencing risk into the Ford Bronco project which could be a handbrake on the timing of when new models are delivered to customers.

That could upend the short term economics and the expected returns from the Ford Bronco supply project. Shipping costs generally have jumped fourfold in the past few weeks around the globe across a diverse range of industries.

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  • 3 months later...

On the basis of a broker report, ARB shed 10% yesterday, and is now $46.30 It hit a high close to $55 earlier in the month and is still up on the CY start of $30 and the April 2020 low of under $15

Credit Suisse reckons ARB will continue to increase its revenue by 4.8 per cent to $621.5 million this financial year, and by 7 per cent to $645.7 million in the 2023 financial year. Its revenue outlook is driven by ARBs strong offshore growth prospects, particularly in the United States.

However, thinner operating margins will lower the bottom line despite that revenue growth. Credit Suisse has revised down its forecasts for ARB net profit after tax (NPAT) by 3.8 per cent for this financial year to $140.4 million and by 13 per cent for 2023 to $135.4 million.

Analyst Andrew Hodge attributed the last year jump in margins to three factors: ARB belt tightening around staff and IT spend during COVID19, retail stores contribution and JobKeeper (which he thinks was least important).

He said that in March 2020, before discretionary retailers knew a locked in population would turn to shopping and before the federal government announced any subsidies, ARB management decided to keep any additional costs out of the business until the revenue future became clear.

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So while ARB is already very well managed, we would go further and say that the cost base relative to the revenue for FY21 was so tightly controlled that it is not sustainable, Mr Hodge said.

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It is these costs predominately around people and IT that we believe are necessary to the longterm success of the company but will reduce the EBIT margin in FY22, FY23 and outer years.

Credit Suisse also thinks the margin compression risk will flow into consensus downgrades over the next two years.

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On 1/12/2022 at 9:48 AM, nipper said:

On the basis of a broker report, ARB shed 10% yesterday, and is now $46.30 It hit a high close to $55 earlier in the month and is still up on the CY start of $30 and the April 2020 low of under $15

and a few % more ... as low as $44 today. Closed a bit higher. Volume pumping through.

(and how I hate American date arrangement/ order.  Day / Month/ Year. Bloody obvious to rational people)

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