BAP (ASX) Ann: Trading Update

Originally posted by shesez ↑

This info is a bit old but it might point to why the company is no longer performing as it did in the past. I dont know about the capability of the current management except to say results speak for themselves. Some retail sales will be feeling it due to cost of living impacts and interest rate squeeze which may impact people servicing their vehicles.
share price up today $4.5250.125(2.84%)
yGaurav Sodhi·15 Mar 2022·5 min read

Ever since Bapcor listed on the ASX in 2014, it has been led by chief executive Darryl Abotomey. In February last year, Bapcor’s board extended Abotomey’s contract to 2023, and it’s easy to understand why.
Under his watch, the business grew from a market capitalisation of $300m to over $2bn. Revenue rose five-fold and earnings per share went from 12 cents to 35 cents. Abotomey was well respected and had an obvious passion for the business.
We were impressed enough to upgrade the stock at the height of the pandemic (see Bapcor keeps truckin’) and have been satisfied with the business's progress to date.
Late last year, however, Abotomey – the executive who had his contract extended months earlier – was abruptly sacked. The board's justification was a deterioration in its relationship with Abotomey. That deterioration has been on public display with a series of announcements that make it clear that Abotomey and Bapcor’s board have fallen out.
Since his departure, other senior managers have left the business, including chief operating officer Jeff Nichol.
One founder of the Burson business, a division of Bapcor, has publicly suggested that Abotomey failed to kowtow to the board and was hence dismissed.
We don’t know what happened, but the sudden departure of an effective, respected leader has us stumped. That it was followed by other departures only raises further doubts.
Bapcor’s business is progressing nicely and – on a price-earnings ratio of 20 with a decent yield and solid balance sheet – the valuation of the company appears reasonable. Yet tussles between board and management, departures of senior executives, and public feuds are not what we want to see.
If you hold Bapcor, we suggest you SELL and watch how things progress from the sidelines. We’ll keep an eye on the business and might wade back in, but we don’t intend to provide additional coverage until we're confident in the board and management. For now, we’re CEASING COVERAGE to focus on better opportunities.

Simply wall st:-
The management team has almost zero skin in the game as well as only short term experience

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Look what has happened since the above was published 2 years ago. Just gut wrenching for shareholders.

Some background on Darryl Abotomey. Darryl had a finance/accounting background and prior to Bapcor was Chief Ececutive at Repco. He is a very tough taskmaster and set incredibly ambitious interrnal targets. Management were well rewarded when targets were met.

One of my mates worked in a key division of Bapcor and was highly successful in his role and was well rewarded. Since his departure around the same time as Abotomey's that particular division has had poor performance and is a real headache now for the broader company.

Selling auto parts in either retail, trade or wholesale is not rocket science but it requires discipline, thorough supply chain knowledge and intelligence and it requires a bit of grunt to get the job done properly. If you measued the Board members against the above criteria you may be surprised how big of a problem the Board has become.

Even at its recent low of $3.76 I would not invest in Bapcor. This has become a Board inflicted basketcase that will take quite a few years to get right and for me that is too great an opportunity cost as I have better places to invest my hard earned.