ARB FY26 Sales Down 3.8%, Final Dividend 35.0 Cents

ARB Corporation Limited (ASX:ARB) reported FY26 sales revenue of $702.0 million, down 3.8 per cent on FY25, with reported net profit before tax down 8.9 per cent to $123.0 million and net profit after tax down 5.2 per cent to $92.4 million. Basic earnings per share were $1.11, down 5.9 per cent, and the effective tax rate decreased from 27.7 per cent in FY25 to 24.9 per cent, which ARB attributed to higher profits generated in Thailand. Underlying profit before tax, which ARB reports before one-off adjustments including property sale gains and a change in the fair value of contingent consideration, declined 10.5 per cent to $118.6 million. Reported profit before tax declined 18.8 per cent in the first half and grew 1.9 per cent in the second half compared with the previous corresponding periods. ARB said sales declined in a challenging economic and geopolitical environment, with lower new vehicle sales in Australia and constrained consumer discretionary spending, and that profits declined as a result of lower sales volumes while gross margins and operating expenses were relatively comparable with the prior year.

By channel, Australian Aftermarket sales fell 3.3 per cent to $390.1 million, representing 55.6 per cent of total sales, with key Australian vehicle platforms down 4 per cent. Export sales rose 0.5 per cent to $268.4 million, or 38.2 per cent of sales; ARB said the US achieved growth of 10.2 per cent despite difficult trading conditions, a figure its export chart attributes to the North and South America region, and separately reported US dollar growth of 13.5 per cent for ARB USA, while the United Kingdom was materially impacted by lower new vehicle registrations and trading conditions were difficult in New Zealand and the Middle East. Original Equipment sales fell 27.2 per cent to $43.4 million, which ARB described as a temporary decline driven by a lull between major vehicle programs and constrained supply of key vehicles rather than any change in its competitive position; the 6.2 per cent share of total sales it attributes to Original Equipment excludes the OE business outside Australia. ARB reported cash flows from operations of $103.7 million, payments for property, plant and equipment of $36.6 million, cash dividends of $83.6 million, and net cash holdings of $47.9 million with no debt; net cash was down $21.3 million, reflecting the 50 cents per share special dividend paid during the year. ARB announced an FY26 final dividend of 35.0 cents per share, following an FY26 interim dividend of 34.0 cents per share, with all dividends fully franked. In its outlook, ARB pointed to improving supply of key four-wheel drive vehicles in Australia including the reintroduction of the Toyota LandCruiser 70 Series, an export business that continues to trend positively with UK registrations expected to recover and Europe performing well although the Middle East remains impacted by regional conflict, and sales to OEMs expected to improve in FY27 subject to OEM supply chains and future platform release timing.