Autosports Group Ltd ((AU:ASG)) has held its Q4 earnings call. Read on for the main highlights of the call.

Autosports Group Ltd delivered a confident earnings call that balanced strong operational momentum with acknowledged financial headwinds. Management highlighted record revenues, rising margins and a rapidly expanding EV order bank, while also addressing higher interest costs, working capital pressures and a reported profit decline driven largely by accounting effects and lease-related charges.

Record Revenue Expansion Across the Network

Autosports Group posted total revenue of AUD 3.186 billion, up 12% year-on-year, powered by acquisitions, new greenfield sites and solid organic growth. The broad-based revenue uplift underscores the strength of demand across the group’s multi-brand dealership footprint and its strategy of scaling prime locations.

Gross Profit Hits Record With Margin Improvement

Gross profit climbed 15% to AUD 590 million, as gross margin improved to 18.5% on the back of a luxury-heavy sales mix and disciplined dealership trading. Management stressed that premium brands remain a core profit driver, reinforcing the group’s focus on higher-value segments to offset cost and rate pressures.

Normalized Profit Growth at Top End of Guidance

Normalized net profit before tax reached AUD 53.5 million, up 11% and at the higher end of guidance, signalling underlying earnings resilience despite macro and funding headwinds. This performance suggests the business continues to generate robust operating returns once one-off and accounting items are stripped out.

Surging EV Demand and Expanding Order Bank

EV demand has accelerated sharply, with management saying interest has tripled since March and helping push the order bank up about 290% over the year. New car orders rose 20% and customer inquiries from the company’s roughly 1.3 million-strong database also increased 20%, pointing to a pipeline that should underpin future deliveries.

Network Expansion and Strong OEM Recognition

The dealership network expanded to 93 sites, while 17 locations were awarded OEM Dealer of the Year honours, underscoring operational execution. Over the past 18 months the group has added 15 greenfield franchises in prime luxury locations, reinforcing its platform in high-margin segments and key metropolitan markets.

Long-Term Compound Growth Track Record

Management emphasised a decade-long growth record, with revenue posting a 10-year CAGR of 10% and vehicle revenue growing 9%. Service and parts revenue, a key recurring income stream, showed an even stronger 16% CAGR, showcasing the resilience and diversification of the group’s earnings base.

Cash Flow Strength and Capital Flexibility

Operating cash flow came in at AUD 59.2 million, with cash conversion of 82%, supporting the group’s investment and expansion agenda. Autosports also highlighted an undrawn debt facility of AUD 85 million and expects net debt to EBITDA to fall below 2x in FY 2027, signalling improving balance sheet flexibility.

Acquisition-Fuelled Growth With Organic Contribution

FY 2026 acquisitions added AUD 204 million in revenue, while prior-year acquisition cycling contributed AUD 76 million and expansion brands a further AUD 22 million. Organic growth remained part of the story, delivering AUD 36 million of additional revenue in FY 2026, indicating demand strength beyond deal-making.

Statutory NPAT Decline Driven by Accounting Items

Statutory net profit after tax fell 18% versus the prior period, largely due to a FY 2025 impairment benefit of AUD 5.7 million not repeating and AUD 2.3 million extra lease-related interest. Management framed the decline as more a result of accounting and lease effects than a deterioration in underlying trading.

Higher Finance Costs and Elevated Debt Burden

Corporate debt stood at AUD 321 million, with total interest expense excluding lease accounting rising by AUD 8.4 million year-on-year. Around AUD 5.9 million of this increase came from acquisition-related borrowings and AUD 2.5 million from rate rises, compressing profit before tax margins along with heavier depreciation.

Margin Pressure at EBITDA and PBT Levels

The group held EBITDA margin at 4.2%, slightly below its historical average of 4.5%, while PBT margin settled at 1.7%. Management acknowledged margin pressure driven by higher interest costs and acquisition-related expenses but argued that improved gross margins help cushion the impact.

Working Capital Build Weighs on Cash Timing

Debtors increased by AUD 72.7 million and creditors by AUD 22.6 million, creating a net working capital outflow of AUD 50.1 million. This working capital build affected cash conversion timing, though the company framed it as a temporary effect linked to growth rather than structural cash weakness.

Rising Employee Costs to Support New Sites

Like-for-like employee expenses rose AUD 14.8 million, or 6.7%, reflecting additional headcount needed for new greenfield locations. Management presented this increase as an investment in capacity to capture growing demand, particularly in premium and EV-focused dealerships.

New Vehicle Revenue Timing Shortfall

New vehicle revenue grew 9%, falling short of management’s expectations despite strong ordering activity, as deliveries lagged demand. Executives described the shortfall as a timing issue linked to backlogs rather than a softening customer appetite, reinforcing confidence in future revenue recognition.

European EV Supply Constraints and Backlog Risk

Supply bottlenecks for European BEV models, notably for BMW and Mercedes, have created a backlog of pre-sold vehicles still awaiting delivery. Management expects this backlog to start unwinding in the second half of FY 2027, but acknowledged near-term delivery and revenue timing risks tied to these constraints.

Property Values and Leverage Considerations

Independently assessed property assets were valued at AUD 263.8 million but are carried at AUD 230 million on the balance sheet, implying about AUD 33.6 million of unrecognised uplift. Acquisitions have lifted net debt, and management reiterated plans to deleverage and restore target leverage levels over the medium term.

Guidance Points to Growth and Deleveraging in FY 2027

Looking ahead to FY 2027, Autosports expects revenue growth driven by a full-year contribution from FY 2026 acquisitions, prior-year cycling and expansion brands. The group anticipates the enlarged order bank and tripling EV demand to convert as European supply normalises, supports capex of AUD 27–30 million, and helps bring net debt to EBITDA below 2x while sustaining margins and cash generation.

Autosports Group’s earnings call painted a picture of robust operational performance anchored by record sales, stronger margins and a powerful EV growth runway. While higher interest costs, elevated debt and timing issues in deliveries have weighed on statutory profit and cash flow optics, management’s guidance and long-term growth record suggest investors should focus on the underlying trajectory rather than short-term noise.