Australia's Bapcor shares plunge to 10-year low on steep profit drop warning (updated)

Bapcor

20/10/2025 04:55

Adds details all throughout; share moves in paragraph 3

Oct 20 (Reuters) - Australia's Bapcor BAP.AX warned of a sharp drop in its half-year profit on Monday due to an impairment charge and intensifying competition, sending its shares tumbling to their lowest level in a decade.

The auto parts retailer said it expects underlying net profit after tax for the first half of fiscal year 2026 to be between A$14 million ($9 million) and A$18 million, sharply down from the A$45.5 million reported last year, and below Visible Alpha estimates of A$41.1 million.

Shares of the Melbourne-headquartered firm plunged as much as 21.5% to A$2.490, their lowest level since February 13, 2015, and placing Bapcor among the top losers on the broader ASX200 benchmark index <.AXJO>, which is up 0.2%, as on 0343 GMT.

Bapcor, which operates retail and trade outlets under the Autobarn, Autopro, Burson and Midas brands, said macroeconomic conditions worsened further in its New Zealand division for the first quarter of fiscal 2026 with margins pressured by intensifying competition.

"Current performance of the New Zealand segment indicates a potential impairment to the intangible assets," the firm said in its statement.

Bapcor also disclosed that an internal review of its trade segment had identified “unsatisfactory operational practices,” prompting a pre-tax impairment charge of A$12 million.

Trade segment is the company's biggest revenue generator, as per its annual report.

Adding to investor concerns, the company flagged a weaker first-quarter trading update, reporting sales revenue of A$497.7 million, a nearly 3% year-on-year decline.

It attributed the softer performance to a challenging retail environment, particularly in its Autobarn business, and a shift in customer demand toward lower-margin products.

Last year, it rejected an A$1.83 billion buyout offer from private equity firm Bain Capital, saying it did not fully reflect the company's value.

($1 = 1.5359 Australian dollars)

 (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips and Harikrishnan Nair)

 ((Rajasik.Mukherjee@thomonreuters.com;))