Amotiv Limited

The Business

Amotiv operates three divisions. 4WD Accessories & Towing (36% of revenue) sells towbars and off-road accessories under Hayman Reese, the number-one towbar brand in Australia. Light Parts & Equipment (31%) covers auto-electrical products including Projecta and Narva. The parts and undercar division (33%) includes Ryco filters, the category leader. All three sell into an ageing vehicle fleet, so demand for maintenance parts holds up even when new vehicle sales soften. Roughly 18% of revenue now comes from outside Australia and New Zealand, up from nil five years ago.

Recent Performance

Amotiv's share price has roughly halved from its prior peak, and the stock now trades at its widest-ever discount to peers such as ARB Corporation and Bapcor. FY26 revenue grew 2.7% to $1,023.9 million, a modest acceleration on the prior year, but EBITDA margin slipped from 22.7% to 22.5% as input costs outran cost savings. The result did little to shift the market's cautious view.

Outlook

Over the next three years we forecast revenue growth of around 3.0% annually, driven mostly by continued offshore expansion rather than a recovery in the domestic new-vehicle market. Gross margin is expected to keep compressing modestly as input cost inflation outpaces pricing actions, with EBITDA margin easing toward the low-21% range. Net profit is expected to dip slightly in the near term before recovering over the following two years, helped by amortisation of acquired brands rolling off, which lifts reported earnings even as underlying operating margins stay under pressure.

Key Risks

An unresolved CEO succession is the largest single risk. The current chief executive departs with no named successor, and while the board has committed to an orderly search with consultancy support, a weak external hire or an extended vacancy could trigger strategic drift and talent attrition in a business that has relied heavily on one leader's judgment for eight years. Structural input cost inflation is a second risk: copper and steel costs remain near multi-year highs, and further gross margin erosion would compress earnings meaningfully if pricing actions and cost programs fail to keep pace. A third risk sits in the balance sheet: goodwill headroom against the APG acquisition is limited, and a further soft year raises the chance of another non-cash impairment following the $190 million write-down already taken in FY25.

What to Watch

The thesis-defining event is the appointment of a new chief executive, expected within 6 to 12 months, which will confirm whether Amotiv's leadership vacuum resolves cleanly or drags into a second year.

• 6-12 months CEO successor announcement — a credible appointment could re-rate the multiple.
• 1-3 years Multiple mean-reversion toward peer levels — closing even part of the discount to peers would be a meaningful positive.

Company Description

Amotiv is an Australian manufacturer and distributor of automotive aftermarket parts, organised into three divisions. 4WD Accessories & Towing, around 36% of revenue, makes towbars and off-road accessories under Hayman Reese. Light Parts & Equipment, around 31% of revenue, covers auto-electrical products under Projecta and Narva. The parts and undercar division, around 33% of revenue, includes Ryco filters. The common thread across all three is that a large share of demand comes from maintaining vehicles already on the road, rather than fitting out new ones, which smooths the business through new-vehicle sales cycles.

Where the Growth Is

Offshore expansion is the clearest growth lever. Non-ANZ revenue now sits at 18% of the total, up from nil five years ago, with the US growing 11% and Europe 22% in the latest year. These are strong percentage gains, but they are being compounded off a base that was zero not long ago, so the dollar contribution is still modest relative to the group. Sustained acceleration in offshore growth beyond current rates would be a genuine positive catalyst over a one-to-three-year horizon.

Competitive Position

Amotiv's brands have held category leadership without displacement for more than two decades: Hayman Reese in towbars, Ryco in filters, and Projecta and Narva ranking among the top three in auto-electrical. That durability comes from decades of dealer and workshop relationships rather than patents, which makes the advantage real but not unassailable, since a well-funded competitor could in principle replicate distribution over time. We view the competitive position as narrow rather than wide: defensible for the next five to seven years on current trends, but requiring continued investment in brand and distribution to hold that ground, rather than a structural barrier that widens on its own.

Management & Capital Discipline

The outgoing chief executive's eight-year tenure delivered roughly 2.5 times revenue growth and built the offshore business from nothing to 18% of sales. Against that, a $190 million impairment on the APG acquisition points to a genuine capital allocation misstep, one that the market has not forgotten. One detail most coverage glosses over: long-term incentive rights vested at zero percent as the share price roughly halved, which is exactly what a pay-for-performance structure is supposed to do, even though it reflects poorly on recent returns.

Financial Position

Amotiv's balance sheet is adequate rather than exceptional. Leverage sits comfortably below the level that would trigger a full risk reassessment, and free cash flow of roughly $145 million a year covers the dividend more than twice over. That combination gives the business room to absorb a soft year, whether from further margin pressure or a weaker consumer, without threatening the balance sheet or the payout.