viewRPM Automotive Group Ltd

RPM Automotive Group increases revenue by 30% to $45.1 million in record breaking FY2021

“Increased demand for commercial and industrial tyres, coupled with significant investment in our wholesale passenger tyres, were the key revenue growth drivers, contributing $22.6 million to the group’s overall record annual revenue," says CEO.

RPM Automotive Group Ltd -

RPM Automotive Group Ltd (ASX:RPM) has increased its revenue by 30% to $45.1 million for FY2021 compared to the $34.6 million on the previous year, demonstrating growth across the Australian automotive aftermarket goods and services space.

In its latest annual report, the company attributed the year-on-year growth to the surge in demand for commercial and wholesale passenger tyres.

Strong revenue growth combined with operational optimisation and disciplined cost management improved the company’s FY21 EBITDA by 32% to $4.5 million – demonstrating a record financial year across all key metrics.

“Strongest results in company’s history”

Speaking to the record full-year performance, chief executive officer Clive Finklestein said: “Over the past 12-months, RPM has generated its strongest results in the company’s history, driven by our people, resilient business model and rapid, yet sustainable growth strategy.

“Increased demand for commercial and industrial tyres, coupled with significant investment in our wholesale passenger tyres, were the key revenue growth drivers, contributing $22.6 million to the group’s overall record annual revenue of over $45 million, up 33% from FY20.

“While we achieved record growth, volatile market conditions were a catalyst for change as we looked to optimise processes and integration within the group.

“We increased our cost management initiatives including improving systems and consolidation of back-end processes across many divisions.

“This helped improve EBITDA by 32% to a record $4.5 million and kept gross profit ahead of guidance.”

Acquisition overview

During FY21, RPM continued to roll out its mid-term expansion strategy, with five complementary businesses incorporated into the RPM Group:

  • Gully Mobile Tyres in July 2020;
  • Citic Autoparts (now RPM Autoparts) in November 2020;
  • Traralgon Tyre Service in February 2021; and
  • Elite Tyre Group and Super Tyre Mart in June 2021.

Two of these acquisitions are yet to have material revenue impact as trading started on July 1 2021, post reporting period.

Another four businesses set to come onboard 

Finklestein continued: “We remain on track or ahead of schedule to reach all mid-term targets including the continued rollout of our expansion strategy.

“This year, we welcomed an additional five complementary businesses to the RPM fold and have another four businesses joining the group by the end of Q1 FY22."

Growth outlook

The record results achieved during FY21, along with the execution of the company’s expansion strategy and increased cost management efficiencies, have RPM well placed to deliver strong growth and another record result in FY22.

RPM believes it is on track to meet all mid-term targets including its expansion targets, with recent acquisitions post reporting period set to launch RPM into two new territories – New South Wales Metro and Far North Queensland.

This will generate further revenue and allow more effective cross-selling of products and cross-pollination of customers.

Since June 30, RPM has secured $8 million in additional funding from an equity placement with Collins St Value Fund to support the company’s continued acquisition growth.

With a strong capital position and plans to use a mix of cash and equity to fund future acquisitions, RPM is confident in delivering on its growth strategy, and under normal trading conditions would be targeting FY22 revenue of $85 million, based on its current operating businesses and operating conditions.

Quick facts: RPM Automotive Group Ltd


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Market Cap: $42.65 m

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