Peter Warren Automotive (ASX:PWR) reported its FY2026 first-half results, with management pointing to growth in higher-margin business lines, tighter inventory discipline, and continued investment in technology and customer experience as key drivers of improved profitability.
Revenue growth and improved profit outcome
Chief Executive Officer Andrew Doyle said first-half revenue was AUD 1.27 billion, up AUD 39 million on the prior corresponding period. Chief Financial Officer Victor Cuthell said the increase was supported by “good contributions” from used vehicles, service, parts, and finance and insurance (F&I), while new car performance was described as steady in a competitive environment.
Underlying profit before tax (PBT) was AUD 12.5 million, up AUD 5.4 million off what management described as a lower base. Cuthell emphasized the result was achieved on a like-for-like basis without acquisitions in the comparable period and credited revenue growth and “very strong discipline” on costs and inventory.
Costs, inventory, and balance sheet position
Management highlighted cost control and stock management as major themes for the half. Operating expenses (OpEx) increased AUD 3.6 million (up 2.4%), which Cuthell said was below inflation. He attributed the increase to award wage changes (noted as a 3.5% award increase) and investment in growth initiatives such as advertising and used car staffing, partly offset by cost actions including lower inventory holding costs, supplier tenders, and careful remuneration management.
OpEx as a percentage of revenue improved to 11.9% from 12.0% a year earlier. Cuthell also noted seasonal dynamics, saying the first-half OpEx ratio is typically higher than the second half and the company expects a lower H2 percentage than in H1, though he did not provide formal guidance.
On inventory, Doyle said the business continued to focus on maximizing stock turns and reducing holdings and related costs. New vehicle inventory was down AUD 19 million to AUD 332 million. In Q&A, management stressed the reduction reflected intentional efficiency improvements rather than an inability to supply customers, describing the approach as a way to reduce floorplan interest and holding costs while maintaining appropriate stock levels through OEM relationships.
The company also reported reduced net debt, with Cuthell saying net debt fell from AUD 83.8 million in December 2024 to AUD 61.5 million in December 2025. He attributed the period’s operating cash flow to a working capital unwind following peak June trading, which he said is expected to reverse in the second half in a normal pattern. Doyle also highlighted the company’s owned property portfolio, valued at AUD 227 million, with net debt to property value at 27%.
Dividend increase and leadership changes
The board declared an interim dividend of AUD 0.03 per share, which Doyle said represented an increase of more than 80% versus the same period last year. Cuthell said the dividend reflected management’s confidence in the business, momentum, and commitment to shareholder returns.
The call also included management updates. Doyle said Cuthell will retire officially in June and transition to an advisor role, and introduced incoming CFO Anna Bale, noting her prior experience at Intercape. Doyle also announced the promotion of NSW COO Paul Hughes to National COO effective March 1, 2026, citing Hughes’ two decades with the business and responsibility for end-to-end national sales and aftersales performance.
Strategy focus: AI, used cars, aftersales, and acquisitions
Doyle reiterated the company’s strategy pillars: innovation via an AI-powered omni-channel operating model, customer obsession, organic growth through performance culture, and disciplined acquisitions. He highlighted the appointment of Ken Quach as Chief Technology Officer, pointing to Quach’s background in data, automation, and AI-driven operations, including 13 years at Qantas.
Management discussed pilots including AI chat across sales leads, automated service booking and communications, and text engagement with service customers. Doyle cited a service payment link pilot that delivered over 25,000 online payments representing more than AUD 30 million in value over the last year, with each payment made in under two minutes without human interaction on the company’s side.
In Q&A, Doyle said used cars remain a major opportunity and tied growth plans to lifting the used-to-new ratio through “very strong and selective sourcing” and a more disciplined approach. On service and parts staffing, he acknowledged technician shortages across the industry but said the company emphasizes “growing our own” through its apprenticeship program and does not see bottlenecks ahead. Management also cited digital tools and data-driven campaigns targeting lapsed service customers as another lever for growth.
On F&I, Cuthell said revenue increased from AUD 17.3 million to AUD 19.4 million for the half, reflecting improved penetration, while noting variability by brand and differences in customer financing propensity. He said the company has high-performing locations and sees opportunities to lift performance further, with expectations penetration will continue to rise.
Doyle also underscored the company’s acquisition strategy, saying revenue from acquisitions has doubled since IPO to more than AUD 3 billion. During the half, Peter Warren agreed to acquire Wakeling Automotive, which Doyle described as adding 16 brands and 30 dealerships in Western Sydney and delivering a “20% uplift” to the pro forma business. Management said Wakeling is culturally aligned, offers synergies across property, people, systems, and customer processes, and will be immediately EPS accretive.
Market outlook: competitive pressure and changing brand landscape
Looking ahead, Doyle said the automotive market remains highly competitive, with Chinese OEMs now accounting for almost 17% of the national market and expected to rise materially over the next few years. He said Peter Warren had 15 Chinese brand dealerships as at year-end, and the Wakeling acquisition would increase that to 22. Doyle added the group represents seven of the eight largest-selling Chinese brands in Australia, with more expected to come online in the second half.
Management described new car supply as mixed, with broad product availability but ongoing risk of inventory pressure that requires disciplined management. They also expect an increasing share of industry earnings to come from higher-margin segments such as used cars, service and parts, and F&I, while characterizing technology adoption and AI as an accelerating differentiator. Doyle said the market remains large and fragmented, with increasing M&A activity, and reiterated that the company expects to remain active in acquisition opportunities.
In discussing gross margin over the medium term, Cuthell said the company expects improvement over time driven by controllable factors and brand cycle dynamics, though he did not give a firm target. He described a potential improvement on the order of “100-plus” basis points over time, while emphasizing it was directional and not formal guidance.
Management closed the call by reiterating confidence in the company’s positioning, citing its customer-centric culture, balanced brand exposure, focus on cost and inventory discipline, and continued investment in digital and AI initiatives.
About Peter Warren Automotive (ASX:PWR)
Peter Warren Automotive Holdings Limited engages in the retail of new and used motor vehicles in Australia. The company also provides vehicle maintenance and repair services, parts, and protection and other aftermarket products; accessories and car care products; and extended service contracts, as well as financing and insurance services. Peter Warren Automotive Holdings Limited was founded in 1958 and is based in Sydney, Australia.
