Autosports Group (ASX:ASG) executives highlighted strong first-half FY2026 earnings growth, improved margins, and continued momentum in luxury-focused acquisitions during the company’s investor presentation and question-and-answer session.
First-half FY2026 earnings and dividend increase
Chief executive officer Nick Pagent said the group delivered “a strong financial result” for the first half of FY2026, pointing to revenue of AUD 1.519 billion (up 11% year over year), gross margin improvement of 0.1%, and a 75% increase in normalized profit before tax to AUD 35.3 million. Statutory net profit after tax rose 107.6% to AUD 21.7 million.
Balanced growth and improved mix
Management emphasized that revenue growth was balanced between organic and acquisition-driven contributions. Pagent said the revenue increase included AUD 44 million of organic growth and AUD 105 million from acquisitions and greenfields activity. Gross profit rose 15.6%, outpacing revenue growth, which the company attributed to an improved revenue mix and inventory profile.
On a divisional basis, the company said all revenue streams increased in the half:
- New vehicles: up 9%
- Used vehicles: up 11%
- Service: up 12%
- Parts: up 16%
Pagent noted the company’s gross margin of 19.1% reflected “strong trading disciplines,” while profit-before-tax margins continued to move back toward long-term averages. He also said January trading was “on track,” with a 13% increase in new vehicle order rate versus the prior corresponding period and service and parts revenue up 11%.
Margins, costs, and finance
Chief financial officer Aaron Murray said first-half revenue growth totaled AUD 149 million versus the prior corresponding period, supported by AUD 105 million in acquired revenue following settlements including Porsche Centre Canberra, Mercedes-Benz Canberra, and the Barry Bourke businesses, plus AUD 44 million of like-for-like growth.
Murray said like-for-like revenue increased across all income streams, including 1.3% growth in new vehicle like-for-like revenue, 5.4% growth in used vehicles, and 5% increases in service and parts. He added that the company expected second-half revenue to benefit from a full six months of trading from the three recent acquisitions.
On margins, Murray said Autosports Group’s “luxury-heavy platform” continued to generate consistently strong gross profit margins, supported by inventory depth and mix and sustained growth in the higher-margin after-sales departments. He cited after-sales growth of 16% compound annually since listing and said the company’s overall gross profit margin in 2025 averaged 21% above Deloitte dealership benchmarks.
Cost discipline was another key theme. Murray said semi-fixed and occupancy costs were “stable to improving,” with like-for-like occupancy costs down AUD 868,000 (a 13.6% decline). He also referenced reductions in “other expenses” of AUD 673,000 (1.3%). Murray noted that employee costs increased by AUD 7.7 million (7%), which he attributed mainly to higher commissions tied to stronger like-for-like gross profit.
On finance costs, Murray said total interest expense increased by AUD 345,000, but like-for-like interest costs were down AUD 1.9 million, which he linked to active debt management and the introduction of a syndicated debt facility. He said the core luxury franchises were operating at a 3.6% profit before tax margin and that the company saw margin uplift potential as synergies from first-half acquisitions were realized.
Acquisitions, network scale, and property strategy
Pagent said Autosports Group’s strategy remains centered on representing “the world’s greatest luxury automotive brands in the best metropolitan markets,” with a focus on disciplined consolidation in a fragmented dealership market. He said the group has grown to 87 new vehicle and motorcycle outlets, with 75 in its core premium segment brands, and has a customer database of over 1.2 million people. Management also said the database generated more than 127,000 new vehicle leads in calendar year 2025.
During the first half, the company added businesses representing brands including Porsche, Mercedes-Benz, Audi, Land Rover, Volvo, Polestar, and Geely. Management called out three first-half acquisitions—Porsche Centre Canberra, Mercedes-Benz Canberra and the Barry Bourke dealerships—as contributors to second-half revenue.
Discussing the Barry Bourke acquisition in more detail, Pagent said the transaction involved AUD 29 million in goodwill and was funded on a 50/50 basis with shares issued at AUD 4.50 per share. He said the acquired business was anticipated to generate around AUD 200 million in annual revenue and was expected to be “immediately accretive.”
On the property strategy, management said the market value of the property portfolio was about AUD 264 million. Murray said the company ended the period with corporate debt of AUD 298 million and property assets carried on the balance sheet at a written-down value of AUD 232 million, while independent valuations indicated an additional AUD 31.8 million of property equity not recognized on the balance sheet. He added that the group had an undrawn AUD 27 million syndicated debt facility.
Outlook: stable second half, margin seasonality, and order momentum
Management maintained a positive outlook for the second half of FY2026, expecting a modestly growing new vehicle market and continued strength in used vehicles, service, parts, and collision repair. Pagent said the company’s portfolio was well positioned for the New Vehicle Efficiency Standard and aligned with consumer preferences. He also said the Southport Mercedes-Benz development was on track and expected to contribute to FY2027 earnings.
In response to analyst questions about gross margins, Pagent said the company had been “sensible” in new vehicle sales and had avoided “subpar” business, crediting improvements in inventory mix and back-end growth for supporting the first-half outcome. He noted that gross margin typically dips slightly in the second half due to seasonality, as new vehicle sales represent a larger share of volume, and suggested the company believes it can maintain gross margin “somewhere between 19.5% and 18.5%” over time.
Asked about January’s 13% order growth, Pagent estimated roughly 9% came from acquisitions and about 4% from like-for-like growth, and said early February data showed the trend continuing. He also said like-for-like inventory was up about 1% in the period and that stock depth had reduced, with the stock mix viewed as the key driver of improved gross profit outcomes.
About Autosports Group (ASX:ASG)
Autosports Group Limited, together with its subsidiaries, engages in the motor vehicle retailing business in Australia. The company sells new and used motor vehicles, aftermarket products, and spare parts; distributes finance and insurance products; and provides motor vehicle servicing and collision repair services. It also operates used motor vehicle outlets; franchised motorcycle dealerships; and motor vehicle collision repair facilities. Autosports Group Limited was founded in 2006 and is headquartered in Leichhardt, Australia.
