Peter Warren Automotive Holdings (ASX: PWR) reported a 35% decline in underlying profit before tax to $14.5 million for FY26, despite revenue holding steady at $2.49 billion, as the company accelerates its pivot toward Chinese automotive brands.
Underlying profit before tax fell $7.8 million year-over-year, while total gross profit rose 1.6% to $406 million, with gross profit margins improving to 16.3% from 16.1%. Operating expenses increased 6.5% to $308.4 million, including $12.3 million in strategic transition investments and $6.4 million in inflationary pressures. Net debt stood at $47.4 million, with a leverage ratio of 0.83 times net debt to EBITDA.
The company declared a final dividend of 0.6 cents per share, fully franked, bringing total FY26 dividends to 3.6 cents per share, down from 4.0 cents in the prior year. Operating cash flow after floorplan interest totaled $67.3 million, with net cash generated after lease payments, loan interest, and tax amounting to $17.7 million.
Shares fell 6.28% to $0.90 following the announcement, extending a 56.1% decline from the 52-week high of $2.05. Peter Warren’s dealership network now includes 17 Chinese brand outlets, up from just two in June 2023, with management projecting these brands will account for over 30% of the portfolio by FY27.
The expansion reflects broader market trends, as Chinese manufacturers have captured roughly 30% of Australia’s automotive market, with volumes surging over 70% year-to-date through July 2026. Key partners include Geely Holding Group, SAIC Motor Group, Chery Group, and GWM Group, with Geely’s EX-2 model ranking as China’s best-selling car in 2025.
Operational metrics showed mixed performance, with new vehicle units sold essentially flat at 31,390, while used vehicle sales reached a record 10,578 units. Service and parts revenue grew 5% to $442 million, and aged inventory declined to 26.1% of total stock. AI-driven customer initiatives contributed $44 million in revenue, with pilot sites capturing 44% of after-hours appointments via automated systems.
