Bapcor Enjoys a Stellar Fiscal 2021, but We Expect Earnings Momentum To Be Exhausted

We raise our fair value estimate for narrow-moat Bapcor to AUD 7.60, from AUD 7.30 previously, principally due to time value of money. Fiscal 2021 underlying net profit after tax, NPAT, increased 47% on the prior corresponding period, or pcp, to AUD 130 million--14% ahead of our prior forecast. The result was aided by government stimulus, pent-up demand, and the first full-year contribution from the Truckline and Diesel Drive acquisitions. Same-store sales grew strongly over the period as the firm's physical footprint continued to expand, and profitability improved across the board in fiscal 2021 underpinned by effective cost controls, improved operating leverage, and an increase in private label sales. Bapcor announced a final dividend of AUD 11.00 cents per share, bringing the full-year fully franked dividend to AUD 20.00 cents per share, 14% above the previous corresponding period.