- National Tyre & Wheel’s (NTD) trading during May and June has exceeded expectations, with higher revenue and lower overhead expenses
- The company expects its operating EBITDA for the 2020 financial year to be between $10.5 million and $11 million
- NTD’s South African subsidiary, Top Draw Tyres, has had limited trading, due to government restrictions reducing its asset value
- However, the company’s balance sheet remains strong, with approximately $20.8 million in cash on hand, as of June 30, 2020
- National Tyre & Wheel is up 17.3 per cent on the market today, with shares trading for 44 cents each
National Tyre & Wheel’s (NTD) trading during May and June has exceeded expectations, with higher revenue and lower overhead expenses.
These results were a welcome improvement on recent forecasts, which expected overhead expenses to be higher.
The company now expects that its operating earnings before interest, tax, depreciation, and amortisation (EBITDA) for the 2020 financial year will be between $10.5 million and $11 million.
However, National Tyre & Wheel has not gone unaffected by the ongoing COVID-19 pandemic.
During the fourth quarter of the 2020 financial year, the company received $960,000 in JobKeeper payments. This represents 25 per cent of people costs for that period of time.
Those payments are included as income, based on the assumption that without them, costs would have been lower.
National Tyre and Wheel has also felt the virus’ impact through its 50 per cent owned South African subsidiary, Top Draw Tyres. Due to government-imposed COVID-19 restrictions, Top Draw Tyres has had limited trading.
As such, the company’s board of directors will review the value of intangible assets acquired through the acquisition of Top Draw. This will take place when the prospects for the business are clearer.
Currently, the coronavirus could impair the value of relevant intangible assets at Top Draw by up to $1.8 million.
In spite of this, National Tyre & Wheel’s overall balance sheets currently remains strong. As of June 30, 2020, the company has approximately $20.8 million in cash on hand, and net cash of $8.5 million.
The company expects to release its audited financial results for the 2020 financial year in the week of August 24, 2020.
National Tyre & Wheel is up 17.3 per cent on the market today, with shares trading for 44 cents each at 2:50 pm AEST.