RPM Automotive Group Ltd (ASX:RPM) non-executive chairman Grant Carman outlined the positive impact of COVID-19 on business performance and addressed key investment areas of focus when he presented at yesterday's Proactive Revenue Webinar.
The webinar saw three ASX-listed companies present with the others being CV Check Ltd (ASX:CV1) and K2fly Ltd (ASX:K2F)
Highlighting why investors should consider RPM as an investment opportunity, Carman said the company was well-funded and diversified across four profitable divisions - motorsport, repairs and roadside, wheels and tyres, accessories, and performance - positioning it for growth into the future.
Increase in domestic drive holidays
With a market cap of around $33.5 million, he said the company had been a beneficiary of COVID-19 tailwinds.
“Closed state and international borders have led to an increase in domestic driving holidays, four-wheel driving and off-roading activities which has resulted in high-demand through the group, so we’ve been very lucky in that regard.
“There was a growing trend that emerged during lockdown where people would go back and have a look and maintain and upgrade their vehicles, taking advantage of that time they had off at home.”
Because of this Carman said RPM’s growth strategy had remained on course, with organic business growth exceeding budget and several potential acquisitions in the pipeline.
Acquisition growth strategy
He continued: “In FY21 we had a full-year revenue forecast to increase by 44% to $49.3 million and currently trading at 6.83 times FY21 forecast earnings, significantly below that of industry peers so again – reflects a good time to buy.
“We’ve had a look at our four major divisional pillars, and we are concentrating on growth in wheels and tyres, repairs and roadside and the performance and accessories divisions.
“The way we look at our strategic acquisitions in growing the business we are very selective – our strategy is to identify same or similar businesses to unlock synergies.
“We are trying to populate across Australia the gaps in our matrix that we don’t have, so its all plus-plus.”