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MELBOURNE - Repco Corp Ltd says it is expecting a challenging second half after posting 67 per cent fall in first half profit.
The Australasian car parts retailer today reported a net profit of A$6.1 ($6.97) million, down from A$18.4 ($21) million in the same time last year.
It said the first half result was disappointing and that earnings were impacted by a store expansion programme.
Chief executive Graeme Yeomans said sales had been on the increase for the past three quarters but remained slightly below the corresponding periods in the prior year.
"Earnings continue to be negatively impacted by the higher cost base arising from the store expansion programme implemented over the past two years, increased competition and a market impacted by higher fuel prices, increased interest rates, and in recent times, drought," Mr Yeomans said.
"This has been an extremely challenging period for Repco, with results for the first half being disappointing."
Mr Yeomans said the current outlook is for trading conditions for the rest of the financial year to be challenging, with earnings before interest, tax, depreciation and amortisation (ebitda), before abnormal costs, to be approximately A$62 ($70.90) million.
Mr Yeomans said the acquisition of Repco by CCMP Capital Asia for A$1.75 ($2) per share is progressing.
He said the board had determined to unanimously recommended the takeover to shareholders in the absence of a superior proposal.
Repco said if the proposed acquisition did not proceed, Repco would likely need to conduct a capital raising to fund future investments in the business and to reduce debt.
Repco shares had eased by half a cent to A10.5 cents by 1030 AEDT.
- AAP
