29 July, 2022
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
New vehicle sales are starting to pick up speed after the proverbial pothole that was COVID forced customers to pump the brakes on purchases. The resurgence is expected to permeate through to a comeback for automobile accessories maker ARB.
ARB Corporation (ASX: ARB) had a special place in the portfolio of Armytage Private Limited’s portfolio, as declared by the investment management firm’s Founder and Executive Chairman Lee IaFraté.
“It’s one of our COVID recovery stories going into ‘23. And it’s our #1 pick in the [ASX] top 100,” said Mr IaFraté on Reach Markets’ The Insider: Meet the Fund Manager in July 2022. Watch the full session.
Mr IaFraté is a 30-year finance industry veteran who has founded multiple investment firms, notably Treasury Group Limited (ASX: TRG) which peaked at $15 billion in funds under management during his tenure from 1997 to 2006.
“There’s a cult following in this country and particularly in the [United] States that is obsessed [with] more chrome, bigger wheels. And ARB features pretty strongly here,” he said.
While the near 50-year-old company manufactures accessories for a wide range of well-known car makes and models, particularly in the 4WD segment, it has had collaborations with automobile giant and pioneer Ford for several years.
In March 2021, after securing its most successful reporting season, ARB entered a strategic partnership with Ford to develop a full suite of premium, aftermarket products for the Ford Bronco.
“It’s effectively a monopoly and we love monopolies,” Mr IaFraté said.
Since the time of speaking, ARB has slid out of the top 100 performing ASX stocks and now sits in the XJO200.
However, the company’s revenues grew in FY22 despite second half sales being impacted by staff shortages due to COVID Omicron, reduced supply of new vehicles and the Ukraine-Russia war. The company has continued its upward trend since FY13.
Sales revenues were $694 million (a tad short of the $706 million forecast) and profit after tax more than doubled from ~$60 million in FY20 to $122 million in FY22. Shareholders also received $50.3 million in cash dividends in the financial year.
ARB’s substantial presence overseas was reinforced with export sales of $269 million (a 17.4% increase on FY21), representing 38.7% of total sales.
While sales revenue in Q1 FY23 encountered a few bumps in the road, the company indicated that its second quarter started on a positive note with longer term initiatives expected to support stronger sales in FY23’s second half and into FY24.
Click here to view more videos from Lee IaFraté’s Meet the Fund Manager session.
Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position. Any advice contained within this presentation is general advice and does not consider your personal circumstances, you should consider whether it is appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.
Past performance is not a reliable indicator of future performance.
Meet the Fund Manager
Upcoming Session
Register for an Upcoming Webcast
This exclusive event gives investors unprecedented access to Australia’s leading fund managers to hear about their favourite companies, unique market insights, and the opportunity to ask questions.
This is a live and interactive online session, and participants are encouraged to ask questions. Spots are limited, so secure yours today.
Book into the next session
By clicking submit, I agree to the terms of the Reach Markets Financial Services Guide that includes the Privacy Statement.
Past performance is not a reliable indicator of future performance.
The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.