Auto parts group Bapcor (ASX: BAP), backed by super funds Australian Retirement Trust and Hostplus, says an internal review has uncovered “unsatisfactory operational practices requiring immediate attention” within its Tools & Equipment unit in the Trade segment, weighing on first-half results.
The news saw Bapcor shares slump 17% to $2.64 in early trade, placing the stock among the ASX’s worst performers.
Three months after analysts questioned whether the company was “investible”, Bapcor told investors on Monday it has launched an externally supported review of the unit and made management changes. The company said the underlying Tools & Equipment business remains “fundamentally sound.”
Earnings impact (1H)
- About $12 million pre-tax in non-recurring margin impacts, stocktake variances and stock adjustments.
- Statutory NPAT: expected $3–7 million, excluding any potential impairment in New Zealand.
- Underlying NPAT (pre one-offs): $14–18 million, versus $46.9 million in the prior corresponding period.
- One-off items totalling $16 million pre-tax ($11 million post-tax) from Trade segment adjustments, plus $4 million pre-tax in restructuring costs tied to savings initiatives.
Full-year outlook (FY26)
- Statutory NPAT: $40–50 million, excluding any first-half NZ impairment.
- Underlying NPAT (pre non-recurring items): $51–61 million.
- For context, Bapcor posted a statutory loss of $253.1 million in FY24 and underlying NPAT of $94.8 million.
Capex sits at $32–38 million for the full year.
Trading update
First-quarter sales were down 3% to $497.7 million, with Trade and Retail weaker and New Zealand conditions described as tough.
Executive chairman and chief executive Angus McKay said Bapcor’s roots are in acquiring rather than integrating businesses, and some accepted practices “do not meet acceptable operational standards nor the required financial/commercial expectations.” He acknowledged the “continued discovery of historic poor operational practices is frustrating,” adding the turnaround is “more challenging and taking longer than expected.”
The disclosures come ahead of Bapcor’s annual general meeting on Thursday.