[Solved] ARB Company Analysis

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[Solved] ARB Company Analysis

ARB Company Analysis

ARB limited is involved in the business of designing, manufacturing, selling and distributing accessories of motor vehicles as well as light metals. The company mainly concentrates on the manufacture of 4×4 luxury vehicles. The company distributes its products to over 100 countries in the world (InvestSmart, 2014).

Fleetwood Limited (FWD) also deals with production of recreational vehicles and accessories. The company is also involved in providing accommodation facilities. Generally, FWD is involved in manufacturing luxury vehicles and accommodation.

2. What important milestones have the companies achieved this year?

In the current financial year, ARB limited has made several milestones. In February this year, the company issued 12,000 ordinary shares fully paid at A$11.65. The company also announced the holding interest of the Commonwealth Bank of Australia together with other corporate bodies. The company also declared a final dividend in August this year of 16 cents per share (Reuters2, 2014).

FWD limited made a milestone in the beginning of the year by announcing an interim dividend of A$0.02 per share. In April, the company announced issuance of 58,592 ordinary shares at A$2.54 per share. The company also announced acquisition of Bocar Limited which is based in South Wales and is key player in automotive industry (Reuters2, 2014).

3. Have the companies made a profit this year?

Both companies have been profitable throughout the year. The graph below shows ARB profits trend for the year.

Source: Reuters2 (2014).

The company’s profitability has been volatile throughout the financial year due to constant changes in the business environment. The company has however maintained positive profitability ratios. The company’s profitability for the year had been decreasing till mid February this year after which it has been increasing constantly to date.

The graph below shows current year profitability trend of FWD limited.

Source: Reuters1 (2014).

The profitability graph above shows a declining trend in the company’s profit in the current year. The company experienced a greater deep in profits in December after which the profits increased rapidly and then resumed a constant decline till today.

Have the companies been profitable for the last 7 years?

The graph below shows ARB profits trend for the past 7 years.

Source: Reuters2 (2014).

The profitability of the ARB in the past seven years since 2007 has been increasing except for a small decline in 2009. The company has been recording positive profitability ratios as well as earning per share ratios.

The graph below shows the company’s profits for the past seven years.

Source: Reuters1 (2014).

The profits of FWD have been volatile for the past seven years. The company recorded declining profits from 2007 to 2009 after which the profits started increasing up to 2011. The profits have been reducing since then. The company has however not recorded a loss within that period (Reuters2, 2014).

4. What are the current sales, by what percent have the sales increased from last year?

The current sales of ARB Limited stand at A$364.70 million an increase of 1.85% from last year.

FWD recorded a sales amount of A$367 million which is an increase of 9.78% from the previous financial year.

5. What are the company’s plans for the future?

ARB Corporation future plans are to increase its production capacity to meet the constantly increasing demand of its products.

The FWD limited company’s future plans are to expand its operations both in accommodation and automobile manufacturing sector in order to outperform financially.

6. Does the company have strong competition?

ARB Company faces stiff competition from similar companies in the industry main competitors in the region being Royal Wolf Holdings (RWH) and AVJennings Limited (AVJ).

FWD experiences stiff competition from similar companies in the industry the key competitors being Royal Wolf Holdings (RWH) Limited and ARB Corporation.

7. How many shareholders does the company have?

ARB has ten major shareholders who hold different percentages of the company’s shares.

FWD has five major shareholders with different percentage holding in the company.

8. What are the current debt levels, has the debt been increasing recently?

The company has not had debt capital since year 2012.

Currently, FWD Company has no debt liability (Yahoo Finance, 2014).