While market volatility still exists, it has certainly diminished and this has enabled the RPM board to make short-term commentary with reasonable certainty.
Shares are more than 7% higher to 14 cents, up from 10.5 cents at close on March 24.
As well as exceeding RPM’s forecasts, the Tyre and Wheel Division has surpassed the overall performance of the tyre and wheel industry.
Increased tyre demand
This is mainly driven by increased demand for TBR and commercial tyres and the inability of RPM’s competitors to maintain consistent supply.
The company’s recent expansion in this sector is also proving successful in driving revenue.
Strong component demand
RPM’s manufacturing businesses have also achieved improved sales figures driven in part by strong demand for components in repairs and roadside, as well as performance and accessories.
As predicted, the group’s retail businesses have experienced significantly reduced turnover due to the COVID-19 restrictions.
Retail businesses remain viable
The government’s Job Keeper and the cash flow boost have ensured that these businesses remain viable during the current quarter.
COVID-19 enforced cost reductions and reduced hours have resulted in improved performances across the group.
Growth at the forefront
RPM’s primary strategy remains on course, with growth, both acquisitional and organic, at the forefront.
With management having resolved the initial challenges resulting from the onset of COVID-19, the company can refocus and continue to pursue acquisitional opportunities.
While there may be delays, the board is confident that it will be able to execute these transactions.
RPM Automotive Group Limited is a leading player in the Australian Automotive Aftermarket.
It comprises a number of businesses involved in importing, wholesaling and retailing of tyres, mechanical repairs, motorsport apparel and safety equipment, niche manufacturing and a roadside assistance service for the transport industry.
The group owns brands such as RPM Racewear, Carline, Genie, Air Anywhere and Formula Off-Road.