MaxiPARTS (ASX:MXI) management said it remains on track to meet full-year expectations, with a “slightly stronger” second half anticipated as investments made in the first half begin to contribute more meaningfully to earnings and cash flow.
Managing Director and CEO Peter Loimaranta told investors the group saw improving activity through the half, with the second quarter stronger than the first. However, he described conditions as uneven by region, citing stronger markets in Queensland and Western Australia, a “reasonable recovery” in Victoria, steady conditions in South Australia and the Northern Territory, and New South Wales as “reasonably difficult.” Loimaranta also noted ongoing “pockets of aggressive activity” on pricing from competitors.
First-half results show modest growth as investment weighed on cash conversion
EBITDA was AUD 13.9 million, slightly higher than the prior period, while the EBITDA margin was 10%, consistent with the prior period and FY2025. Management attributed margin stability to pricing discipline, product mix benefits (including growth in Japanese parts), and a continued focus on gross profit margins, despite costs associated with new initiatives.
Net profit before tax from continuing operations was AUD 6.0 million, slightly higher year-over-year. Net profit after tax from continuing operations was also reported at AUD 6.0 million, up AUD 0.3 million on the prior period. The company also reported a AUD 3.6 million loss related to discontinued operations, which management said reflected a non-cash FY2025 CapEx-related entry.
Operating cash conversion was 65% in the first half, compared with prior halves of 80% and 88%. The lower conversion was attributed to working capital investment—particularly inventory—along with the Kalgoorlie store setup and the completion of the purchase of the remaining stake in Förch Australia. Management said it expects cash conversion to return to 80%+ in the second half.
Working capital build and Förch buyout lift net debt
Working capital increased by AUD 4.6 million over the half, reflecting inventory investment across the MaxiPARTS network to support the new Kalgoorlie site and growth in key customer accounts, along with seasonal inventory build typical at the half-year.
Net debt ended the period at AUD 8.7 million, an increase of AUD 1.5 million, driven by the higher working capital position and the buyout of the remaining 20% interest in Förch Australia. The financial liability related to that remaining interest was reduced to nil from AUD 2.2 million at FY2025 year-end, following funding from cash and completion in July.
Management also highlighted a reduction in interest expense versus the prior comparative period, which was attributed to reduced rates in the fee structure on the group’s main debt facility.
Interim dividend raised 36% as payout policy shifts
The company declared a fully franked interim dividend of AUD 0.0415 per share, up 36% year-over-year. Management said the increase reflected both slightly improved financial performance and a shift in dividend policy, lifting the payout ratio from 40% to 50% of group profits—an intention the company had communicated at its November AGM.
On capital management, the company reported a total borrowing facility of AUD 28 million, with a utilization ratio of 80% and a leverage ratio of 0.3x, which management described as well below its internal threshold. The company said it expects free cash flow to be directed toward reducing drawn debt in the second half while supporting the higher dividend distribution level.
Operating update: Kalgoorlie ramps, Japanese parts grow double digits
Loimaranta reiterated the group’s two-division structure: MaxiPARTS (truck and trailer spare parts) and Förch Australia (workshop consumables).
Within the MaxiPARTS division, management emphasized the early performance of a new greenfield site in Kalgoorlie, Western Australia. The store commenced trading at the end of July and reached profitability or break-even in September, with management reporting continued strong growth since launch.
MaxiPARTS also highlighted its Japanese product segment, which Loimaranta said grew at levels greater than 15% year-on-year in the half. The company expects that segment to continue growing at double-digit rates and noted that Japanese parts carry higher margins than the traditional MaxiPARTS business, helping to lift average group margins over time.
The company said like-for-like underlying revenue growth for the MaxiPARTS operations business was 2.6% when stripping out the final impacts of revenue streams linked to a trailer business sold in 2021, which had contributed revenue into the prior first half.
- Customer wins and rollouts: Management cited key customer wins and regional rollouts as contributors to growth and said it expects these to continue in the second half.
- Inventory optimization: The company said it remains focused on inventory optimization to support cash improvements.
- Product data/catalog initiatives: Management described a project to accelerate product data and cataloging, linked to its customer inventory management system (MaxiStock).
Förch: sales team expansion, margin expectations, and synergy efforts
In the Förch Australia business, management said the company operates from three warehouses (Perth, Brisbane, and Melbourne) and does not anticipate further site investment given the consumables product profile. The company has been expanding its national sales team and described the business as having a significant growth runway, pointing to a larger competitor with more than AUD 185 million in annual Australian revenue. Management said it expects Förch to exceed AUD 20 million in revenue this year.
Loimaranta said first-half Förch revenue came in slightly below the company’s expectations for low double-digit growth, though management did not characterize the miss as material and said it expects to catch up in the second half. EBITDA margins in the division declined slightly, which management attributed to staffing investment and operational consolidation efforts, noting the business is sensitive to near-term investments at its current scale. Even so, management said Förch margins remain above the traditional MaxiPARTS business.
During Q&A, management said Förch added four sales staff—about 10% of the Förch workforce—with hires added progressively, starting at the end of the financial year and the most recent joining in November/early December. Asked about longer-term margins, Loimaranta said the company would “probably expect” margins to be in the mid-teens as it pursues a higher growth profile, with potential to lift toward 20% as scale increases and the business matures.
Management also outlined initiatives intended to support second-half performance, including benefits from a CRM system implemented at the end of FY2025, pricing adjustments made toward the end of the first half, and efforts to improve warehousing, freight, and supply chain efficiency. The company also cited ongoing synergy work between the businesses, including expanding Förch product offerings through MaxiPARTS stores, a joint trade store pilot program in Truganina, and coordinated targeting of key customer rollouts.
Looking ahead, management reiterated confidence in meeting full-year expectations, with stronger second-half revenue, profit, and cash conversion anticipated. The company said it does not foresee any abnormal CapEx or major investment projects in the second half.
About MaxiPARTS (ASX:MXI)
MaxiPARTS Limited, together with its subsidiaries, distributes and sells commercial truck and trailer parts in Australia. The company sells, wholesales, and trades in commercial vehicle parts to road transport operators, as well as commercial vehicle service and repair providers under the MaxiPARTS brand. It also offers lights, tools, oil and filters, axles, suspensions, and brakes. In addition, the company provides cable ties, cleaning consumables, greasing and fluid transfer, load restraint systems, mirrors, tools, wipers, signage, safety products, and other accessory products; automotive globes, lighting, terminals, connectors, coils, batteries, electrical accessories; switches, flashers, relays, horns, and other technology related products.
