Bapcor shares have fallen to a decade low after the auto parts company flagged that it would take a $12 million hit to its bottom line after identifying "poor operational practices" in its tools and equipment's business records.
"Our roots have been built on acquiring businesses, not integrating them," said Angus McKay, who has been Bapcor's executive chair and CEO for the past 15 months.
"Some of the practices that have been accepted inside the wider businesses do not meet acceptable operational standards nor the required financial/commercial expectations."
Bapcor said its first-half earnings would be negatively impacted by around $12 million in "stocktake variances and stock adjustments" - meaning that its inventory of goods being held for sale didn't match reality.
The problems were in Bapcor's trade division, which consists of BNT Brake & Transmission, Burson Auto Parts, Precision Automotive Equipment and New Zealand-based Truck & Trailer Parts.
The stock adjustments were individually small, but taken together will have a significant impact on Bapcor's first-half earnings, said the company, which also owns Autobarn, Battery Town and Midas Australia.
Changes in management have been made and an externally supported review is underway, Bapcor said.
"I acknowledge the continued discovery of historic poor operational practices is frustrating, however we are committed to facing the issues and correcting them," Mr McKay said.
"The turnaround of the business is more challenging and taking longer than expected but will result in a stronger, more sustainable company."
Bapcor also announced on Monday that its first-quarter trading was below expectations, with sales down 2.7 per cent to $497.7 million compared to the same three months a year ago.
Bapcor said it would engage in a $20 million cost-cutting program, including simplifying support office structures.
Bapcor said it expected an underlying full-year net profit in the range of $51 million to $61 million, nearly a third less than the $82.1 million that analysts had forecast.
Around midday, Bapcor shares were down 15.1 per cent to $2.69, and had been as low of $2.54 - their lowest level since early 2015.
In July 2024, Bapcor's board rejected an all-cash, tentative takeover offer of $1.83 billion from Bain Capital that would have paid shareholders $5.40 per share.
