From ASX listed companies, there are a few stocks, which while giving good dividend yield, have good growth potential. Such high growth stocks standout for their consistency apart from being high dividend stocks.
Eagers Automotive Limited (ASX: APE)
Eagers Automotive Limited (ASX: APE) reported strong financial performance for the first half of 2024, with revenue reaching a record $55 billion, reflecting a 13.4% increase from the previous year. Despite a slight decrease in underlying operating profit before tax to $182.5 million (down from $207.4 million in 1H23), the company experienced robust contributions from its core Franchised Automotive business, large-scale acquisitions, and maturing greenfield businesses. These factors, combined with a record first-half new car market, resilient vehicle margins, and strong demand, helped the company achieve its highest-ever EBITDA, up 4.6% compared to the same period last year. The independent pre-owned vehicle segment also had a record half-year profit due to normalised supply and the continued rollout of its benchmark operating model. Although the Retail Joint Venture faced challenges from excess inventory clearance, it is expected to recover in the second half of the year.
Eagers Automotive remains in a strong financial position with a substantial property portfolio and $444.7 million in available liquidity as of June 30, 2024. This liquidity includes cash and undrawn corporate debt facilities. The company refinanced its syndicated term debt and property debt after June 30, boosting its undrawn debt facilities to $797.0 million. This solid financial foundation provides the company with flexibility to pursue future growth through organic investments, greenfield initiatives, mergers and acquisitions (M&A), and proprietary technology advancements. Additionally, the company continued to execute its property strategy, acquiring $56 million worth of prime real estate, which is expected to settle in the second half of 2024.
Eagers Automotive expects the continuation of the growth trend from 2024 full-year results in organic and acquisition-led growth. The company anticipates sustainable growth in its independent pre-owned business, backed by its proprietary technology and strong inventory sourcing capabilities. It also expects a recovery in its Retail Joint Venture, driven by inventory normalisation, expanded retail partner networks, and strong demand for affordable electric and hybrid vehicles. Performance improvements are expected from recent acquisitions, and the company will continue rolling out its unique technology initiatives to drive productivity gains. Furthermore, Eagers Automotive will maintain its disciplined approach to evaluating new growth opportunities, in line with its Next 100 Strategy.
Despite the challenging macroeconomic environment, Eagers Automotive remains well-positioned to navigate external cost pressures and consumer uncertainty. The company remains focused on its long-term sustainable growth strategy, which includes optimising its core automotive retail business, expanding its retail joint ventures, and continuing to pursue new acquisitions and partnerships. The company’s strong balance sheet and ample liquidity provide the necessary resources to capitalize on attractive opportunities as they arise, ensuring long-term value for shareholders. Eagers Automotive also remains committed to rewarding shareholders with consistent dividends and strong total returns.
Source: Company’s Report
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