The National Tyre & Wheel Ltd (ASX: NTD) share price is plummeting today on the back of its earnings for the first half of financial year 2022.

At the time of writing, the National Tyre & Wheel share price is $1.33, 16.75% lower than its previous close.

Though, that's an improvement on its intraday low of $1.21 – representing a 24% drop.

National Tyre & Wheel share price tumbles on as profit slides

• Revenue of $251.5 million ­– up from $212.4 million in the first half of financial year 2021
• Net profit after tax (NPAT) of $5.56 million – down from $9.83 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $17.44 million – down from $20.76 million
• 4.7 cents of earnings per share (EPS) – down from 8.7 cents
• Operating cash flow came to a loss of $4.3 million – down from $10.7 million
• 3 cent interim dividend ­– flat with its previous interim dividend

National Tyre & Wheel's diversified earnings streams offset some of the COVID-19 and supply chain disruptions experienced by the company in the last half.

Demand for the independent tyre and wheel importer and distributor bore the impact of lockdowns and outbreaks that saw staff availability, customer fulfilment, and sales volumes fall.

Sales volumes were also hampered by supply chain issues that saw shipping capacity impacted while delays in overland transport increased.

As a result, the company's inventory levels in December were around $15 million higher than normal.

Additionally, associated costs saw most of the company's business units pushing two or more price rises last half, with more expected to come.

However, two months of earnings from its newly-acquired Black Rubber business offset some of the pandemic-related expenses.

Expenses were also higher than the prior comparable period due to the company's ownership of new acquisitions, employment costs born from extra staff, and marketing costs.

The company ended the period with $90.3 million of debt and $45 million of cash.

What else happened during the half?

During the first half, National Tyre & Wheel acquired Black Rubber ­– sending its share price surging 6.5% in November.

The purchase cost the company $26.3 million. It bolstered National Tyre & Wheel's commercial truck and bus tyre offerings, value-add services, and provided tyre recycling abilities.

It also acquired Access Alloys for $1.121 million last half.

The purchase saw National Tyre & Wheel's subsidiary, Dynamic Wheel Co, with exclusive Australian distribution rights for brands American Outlaw and Elite Off Road.

The company expects the brands to bring annualised earnings before interest and tax of at least $500,000 from annual revenue of more than $3 million.

What's next?

The company expects its surplus inventory to reduce this quarter. It also expects COVID-19 impacts to lessen over the current half.

National Tyre & Wheel expects its revenue to strengthen over the remainder of the financial year, driven by promotional activities, cross-selling opportunities, and organisational changes at its subsidiary, Tyres4U.

Earnings could also be bolstered by recently acquired businesses (the company also acquired Carters Tyre Service in January, conducting a share purchase plan to do so), ­along with cost savings.

Additionally, the fourth quarter is normally National Tyre & Wheel's strongest. It's expected to be stronger this year, partly due to more stable trading conditions.

However, its factory and shipping costs are expected to peak this year, while employment costs could increase due to low rates of unemployment.

The company's now focusing on improving margins in its existing businesses rather than more merger and acquisition activity.

National Tyre & Wheel is confident organic revenue and earnings growth will continue from financial year 2023, with warehouse consolidations in Sydney and Melbourne completed and new purpose-built leased premises in Brisbane and Perth to be completed in the December quarter.

That puts the company on track for occupancy savings and logistic synergies of around $3 million annually.

National Tyre & Wheel share price snapshot

Today's slip has plunged the National Tyre & Wheel share price into the year-to-date red.

It's now trading for 9% less than it was at the start of 2022.

However, it's still 56% higher than it was this time last year.

The post National Tyre & Wheel (ASX:NTD) share price plunges 24% on half-year earnings appeared first on The Motley Fool Australia.

The National Tyre & Wheel Ltd (ASX: NTD) share price is moving into positive territory today. This comes after the company released its share purchase plan (SPP) offer booklet to investors just after market close yesterday.

At the time of writing, the tyre and wheel retailer's shares are fetching for $1.43 apiece, up 1.42%. This means that its shares have now risen more than 15% in the past month alone.

Share purchase plan details

Investors are sending the National Tyre share price higher following the company's invitation to retail shareholders to participate in its SPP.

Following the successful $9 million institutional placement, National Tyre has extended its offer to eligible shareholders.

Under the SPP, investors can apply to buy a parcel of National Tyre shares for $1.35 per share. The same terms offered in the placement represent a discount of 3% to the volume-weighted average price over 10 trading days from 16 December (when the capital raising was announced).

A minimum application amount of $500 and a maximum application amount of $30,000 can be applied for.

National Tyre is seeking to raise a total of $3 million through the SPP. However, this can be scaled back or increased in size depending on the total value of the applications.

The proceeds raised will be used towards funding a number of initiatives for the company. This includes funding further investment in its digital transformation strategy and working capital, as well as the non-trading indebtedness adjustments associated with the acquisition of Carter's entities.

The closing date for the SPP will take place on 20 January. Allotment of the new shares is scheduled for 28 January, with trading available the following business day on 31 January 2022.

National Tyre share price snapshot

Over the course of the last 12 months, National Tyre shares have accelerated to post gains of 50%.

Based on today's price, National Tyre commands a market capitalisation of around $172.33 million, with approximately 122.22 million shares outstanding.

The post Here's why the National Tyre (ASX:NTD) share price is edging higher today appeared first on The Motley Fool Australia.

The National Tyre & Wheel Ltd (ASX: NTD) share price is gaining momentum on Tuesday morning. This enthusiasm has sprung to action following the tyre and wheel retailer announcing an acquisition.

In early trade, shares in the company are being exchanged for $1.24 apiece, up 8.3%. However, the intraday high was set at $1.30 soon after the market opened.

Let's take a look at the details of the deal.

What's moving the National Tyre share price today?

Investors are bidding up the price of National Tyre and Wheels shares with ferocity after the company revealed a new acquisition this morning.

According to the release, a share sale and purchase deed was signed yesterday for the acquisition of Black Rubber. The company being acquired operates under two entities, both Black Rubber Pty Ltd and Black Rubber Sydney Pty Limited. National Tyre is set to acquire Black Rubber in its entirety for a total consideration of up to $26.3 million.

Moreover, several facets of Black Rubber have appealed to National Tyre in the making of this deal. Firstly, it expands upon the company's current offering of commercial tyres for trucks and buses.

In addition, value-add services such as pricing based on cents per kilometre solutions, tyre performance monitoring, fitting at customer depots, and retreading capabilities are all offered by Black Rubber.

Despite being established in 2013, the company to be acquired has expanded operations across three states. These are Western Australia (Perth and Port Hedland), Queensland (Brisbane), and New South Wales (Sydney).

Its revenue from these sites are predominantly from selling truck, bus, and agricultural tyres to commercial fleets and other business to business customers — at 60% of revenue.

National Tyre plans to put Black Rubber's relationship with Michelin to good use. The target company operates three of the four retread factories in Australia, with authorisation to use Michelin materials and techniques. As such, Black Rubber retreads are planned to be sold through National Tyre's distribution network.

Looking at the numbers

Bolstering the company's earnings, Black Rubber is expected to achieve $5.5 million in earnings before interest, tax, depreciation, and amortisation (EBITDA) in FY22. This would be on an anticipated ~$40 million worth of revenue during the period.

Based on this information, National Tyre will be paying 4.7 times Black Rubber's FY22 forecast EBITDA for the acquisition. However, $5.2 million of the total consideration will be dependent on earnings over the next two financial years.

The National Tyre & Wheel share price is now up nearly 64% in the past year.

The post National Tyre (ASX:NTD) share price surges 8% on acquisition news appeared first on The Motley Fool Australia.

The National Tyre & Wheel Ltd (ASX: NTD) share price has surged more than 21% this morning after another trading update from the Aussie motor vehicle group.

At the time of writing, National Tyre shares are trading at $1.04.

Why is the National Tyre share price climbing?

The National Tyre share price has rocketed higher at the open following a 2.4% gain in yesterday's trade. Today's big news was National Tyre providing updated guidance for the financial year ended 30 June 2021 (FY2021).

National Tyre reported that trading in Q3 had "continued recent trends". As a result, it expects to record operating earnings before interest, tax, depreciation and amortisation (EBITDA) of between $31 million and $33 million in FY2021. That figure excludes items relating to the August 2020 Tyres4U acquisition and AASB16 adjustments.

This comes after a strong trading update in January that saw the company's share price rocket higher. In that announcement, the company said first-half trading had "exceeded expectations".

Per this morning's release, the company is now estimating basic earnings per share (EPS) of 17 cents. That represents a significant payout against yesterday's $0.85 closing National Tyre share price.

National Tyre also provided an update on its financial position. The company said its balance sheet remained strong with $24.8 million of cash on hand at 31 March 2021. The group's net debt sits at $19.3 million as at quarter-end.

Today's guidance assumes no material impact on operations from a market downturn or withdrawal of the JobKeeper program.

Foolish takeaway

Shares in the Aussie motor vehicle services group are surging higher in early trade. Today's update is just one of many good performance updates from National Tyre over the past 12 months.

The National Tyre share price has rocketed 226.9% higher in the last year. That comes amid a hot used car market in part due to strong economic stimulus measures and reduced consumer spending options due to the coronavirus pandemic.

The post Why the National Tyre (ASX:NTD) share price rocketed 21% today appeared first on The Motley Fool Australia.

National Tyre & Wheel Ltd (ASX: NTD) shares soared nearly 20% to $1.13 at today's open after a strong trading update from the Aussie company. At the time of writing, the National Tyre share price has retreated slightly and is trading at $1.09, up 14.7%. 

Why is the National Tyre share price surging?

The Aussie motor vehicle product distributor released a half-year trading update after the market close on Friday. Trading in the first half of 2021 (1H 2021) has "exceeded expectations" with all business units performing better than expected.

National Tyre said it had achieved record sales of agricultural tyres and 4-wheel drive wheels. That has contributed to a pick up in expected half-year earnings for the period ended 31 December 2020. Margins have also improved with less discounting and favourable foreign exchange rate movements.

The National Tyre share price has surged higher following the update and upgraded earnings before interest, tax, depreciation and amortisation (EBITDA) guidance. National Tyre is forecasting $15.0 million and $15.5 million of operating EBITDA for 1H 2021. That figure excludes $1.4 million of non-recurring and abnormal costs from the company's Tyres4U acquisition. It also excludes AASB16 adjustments and the five months of contributions from Tyres4U.

Shares in the Aussie motor vehicle distributor had previously surged back in November 2020. That came after another earnings guidance upgrade in which operating EBITDA was forecast to total $11.5 million and $12.5 million. That means today's upgraded figures represent a 24% to 30% increase on previous figures from the company.

On the balance sheet side, National Tyre said the group's financial position remains strong. The group reported $22.4 million of cash on hand and $18.0 million of net debt. Despite the positive update, management noted that it's "too difficult to say" if the first half results will be more indicative of second-half performance compared to prior guidance. 

National Tyre is expecting to announce interim results (including any dividends) on or about 24 February 2021.

Today's jump means the National Tyre share price has now surged more than 150% in the twelve months since 28 January 2020. 

The post Why the National Tyre (ASX:NTD) share price is soaring 15% today appeared first on The Motley Fool Australia.