Eagers Has the Pedal to the Metal

Narrow-moat-rated Eagers Automotive is making hay while the sun shines, with a surge in new car demand and tight vehicle supply driving a strong start to calendar 2021. The auto retailer is expecting to report interim underlying profit before tax of AUD 219 million--a fourfold increase on the previous corresponding period, or pcp, marred by COVID-19 restrictions. New vehicle sales were decimated by the virus in calendar 2020, particularly while restrictions were in place, with national new vehicle sales down 14% compared with 2019. But as restrictions eased, Government stimulus and pent up demand flowed through to increased sales. New vehicle sales have rebounded strongly from April 2020 lows (where sales were nearly half that of the pcp) with year-to-June 2021 new car sales 28% higher than the pcp.