Fund Manager Summary on Rpm Automotive Group Ltd (ASX:RPM)
In January 2026, DMX Asset Management commented that Rpm Automotive Group Ltd (ASX:RPM) has been a laggard with recent results but still presents significant value and upside, with attention focused on progress in its tyre‑recycling initiative, balance sheet improvement and the potential influence of activist investor Jeremy Raper. Across prior commentary DMX consistently highlighted that RPM is a national auto‑parts distributor with a large tyre exposure (tyres ~70% of sales, ~80% of tyre volumes to commercial customers), a ~26‑location footprint with 11 distribution centres and about $120m revenue, and that the company issued FY guidance of $12m–$13m EBITDA (expected to convert to $5m–$6m NPAT) while trading on a low multiple (cited market cap ~$15–16m; ~3x PE), with the core business managed adequately but historically underperforming vs expectations; the key strategic opportunity is the recently launched tyre‑recycling operation that converts a prior cost of end‑of‑life tyres into margin and is expected to contribute in FY26, leveraging RPM’s vertical integration and reverse‑logistics (on‑site shredding in Melbourne with plans to expand to NSW/QLD and potential third‑party processing), while principal risks include execution and scaling of recycling (noting the sector’s difficulty and a peer insolvency), continued underperformance in trading, balance sheet strength, and the impact of significant holders (DMX increased to ~11% in May 2025 and an activist holds 5% as of January 2026); actionable monitoring points are near‑term reporting on early recycling contribution and FY26 earnings flow‑through, balance sheet metrics and cash generation, evidence of recycling volume ramp and margin capture, progress on geographic expansion of processing capacity, and any corporate actions or strategic moves prompted by larger shareholders.
Commentary From The Managers
There are 7 insights from 1 fund managers regarding their investment in Rpm Automotive Group Ltd (ASX:RPM) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
DMX Asset Management
28 Feb 2026
$0.03
Summary
- DMX Asset Management continues to hold RPM Automotive while acknowledging persistent execution challenges and the possibility that corporate restructuring may be required to recover value.
- RPM Automotive was one of the few portfolio companies to see revenue decline during the period, with EBITDA of $2.5m at Q1 failing to improve through the half, implying a very challenging second quarter.
- Management believes changes implemented in the half will result in an improved second-half result, though DMX notes the company has been unable to consistently deliver adequate outcomes since its 2018 IPO.
- With RPM comprising four separate business units, DMX considers the possibility that the sum-of-parts value may exceed what management can deliver at a group level, making some form of corporate activity a potential path to recovering shareholder value.
DMX Asset Management
31 Jan 2026
$0.06
Summary
- DMX Asset Management believes RPM Automotive is materially undervalued after recent operational setbacks, and continues to hold because the company offers significant upside if tyre recycling progresses and the balance sheet strengthens.
- Underperformance: RPM has been a laggard for us, with results failing to meet our — and the market’s — expectations over the past couple of years.
- Value thesis: We continue to see significant value and upside potential if operational execution and financial trends reverse.
- Tyre recycling: We are watching updates on the fledgling tyre recycling business as a potential new growth and margin driver.
- Balance sheet focus: We will be looking for signs the balance sheet is moving in the right direction (cash flow improvement, debt reduction, working capital management).
- Activist involvement: Jeremy Raper has recently acquired a substantial (5%) stake; we will monitor how his involvement potentially shapes operational or governance outcomes.
- Near-term monitoring: Our attention is on operational improvements and balance-sheet metrics that would validate the upside case.
DMX Asset Management
26 June 2025
$0.06
Summary
- DMX Asset Management continues to hold RPM Automotive Group Ltd due to its solid operational foundation as an auto-parts distributor.
- RPM primarily sells wheels, tyres, and auto accessories to both wholesale and retail markets, with approximately 70% of its business focused on tyres.
- About 80% of tyres sold are directed towards commercial customers, including trucks, commercial fleets, and off-road mining.
- The company has a substantial national footprint with 26 locations across the east coast and 11 distribution centres.
- RPM Automotive reported $120m in revenue, which is reasonably sized relative to its $15m market cap.
- The core business is operating well and is managed effectively.
- A key highlight is RPM's tyre-recycling opportunity, driven by new legislation regarding the disposal of used tyres.
- Previously, RPM incurred significant costs for the disposal of end-of-life tyres, but they have now invested in technology to shred old tyres and sell them to a counterparty.
- The recycling operation is now operational and was formally launched at the investor day in May.
- This shift transforms a cost line into a revenue-generating operation, with expected contributions reflected in FY26 numbers.
- Guidance for ETR is projected at $12–13m, converting to $5–6m NPAT.
- RPM is currently trading at a 3× PE ratio, with potential upside from the recycling business.
- While tyre recycling poses challenges—evidenced by another operator's administration—RPM benefits from vertical integration.
- The reverse-logistics model allows for efficient operations, where trucks deliver used tyres to the Melbourne facility, shred them, and then leave with new tyres.
- This model ensures a continuous supply of used tyres, enhancing operational efficiency.
- There is potential to process tyres for other retailers and distributors, with existing capacity in Melbourne and plans to expand to NSW and Queensland.
- For the upcoming results, RPM is expected to meet guidance and there is interest in details regarding the early contributions from the recycling operation.
- DMX Asset Management aims to roll forward to assess the FY26 earnings profile.
DMX Asset Management
31 May 2025
$0.06
Summary
- DMX Asset Management remains enthusiastic about RPM Automotive Group Ltd, an auto-parts distributor.
- RPM provided full year guidance of $12m-$13m EBITDA, with expectations for $5m – $6m NPAT.
- The company launched its used tyre recycling operations during an investor day.
- New legislation mandates responsible disposal of used tyres, which previously incurred costs for RPM.
- RPM has invested in technology to recycle tyres, converting a cost into a profit-generating operation.
- With a market cap of $16m, RPM trades at a 3x PE ratio.
- DMX Asset Management has increased its holding in RPM to approximately 11%.
DMX Asset Management
31 Dec 2024
$0.07
Summary
- DMX Asset Management recognizes RPM Automotive (ASX:RPM) as a significant player in the automotive sector with a wide reach, operating 26 retail locations and 11 distribution centres.
- RPM generates revenues exceeding $130 million, with tyre sales representing 70% of its business.
- The company has a strong opportunity to leverage its tyre distribution network and expand into tyre recycling, presenting a compelling growth profile.
- A new tyre recycling facility is set to launch in 2024, transforming recycling from a cost centre into new revenue streams.
- If the recycling model is successful and can be replicated, it could significantly accelerate earnings and attract a new cohort of investors interested in the circular economy.
- With a current market cap of $18m and a projected NPAT of $4.6m for FY24, RPM is trading at a historical PE of less than 4x.
- This presents substantial potential for a re-rate if RPM scales its recycling operations successfully.
DMX Asset Management
11 June 2024
$0.06
Summary
- DMX Asset Management continues to hold a positive outlook on RPM Automotive Group Ltd based on its extensive national footprint with 26 retail locations and 11 distribution centers, achieving revenues of over $130 million.
- Tyres account for 70% of RPM’s business, primarily servicing commercial customers.
- Despite growing profitability through acquisitions, RPM’s debt levels appear excessive compared to its low market capitalization.
- EPS growth has been limited despite EBITDA growth, due to shares issued from capital raisings.
- The share price has fallen significantly over the last three years, reflecting negative market sentiment.
- New leadership under CEO Guy Nicholls is leading to operational improvements and better capital allocation.
- RPM is shifting focus from acquisitions to organic growth initiatives, including a tyre recycling plant that promises economic benefits and sustainable practices.
- Continuous improvements in margins, cash flows, and EPS growth, evident in record half-year profits.
- RPM has announced an earnings upgrade for FY24 and is targeting continued EBITDA growth for FY25.
- Increased investor engagement with a successful open day showcasing growth strategies and upcoming plans.
- Sector M&A activity suggests RPM is undervalued relative to other players in the market.
- Despite concerns over net debt, it is seen as manageable and backed by tangible assets.
- Potential divestments of non-core assets could further strengthen RPM's balance sheet.
- With improving fundamentals, DMX Asset Management believes RPM is being priced at a significant discount, warranting a re-evaluation from the market.
- Overall, DMX Asset Management views RPM as an undervalued, growth-oriented company with strong future prospects despite current market neglect.
DMX Asset Management
30 Apr 2024
$0.07
Summary
- DMX Asset Management became a substantial shareholder in RPM Automotive Group Ltd after a $4m capital raising.
- RPM has diverse automotive businesses with a national presence - 26 retail locations, 11 distribution centers, and over $130m in revenues.
- Despite growth from acquisitions, RPM’s debt levels are seen as excessive relative to its sub $20m market cap.
- Positive business momentum is evident with a new CEO, Guy Nicholls, enhancing operational focus and capital allocation.
- RPM is shifting from acquisitions to internal growth initiatives, notably in tyre recycling, potentially transforming costs into profits.
- Record half-year profit for HY24 with 74% NPAT growth highlights improved margins and cash flows.
- Management upgraded FY24 EBITDA expectations to between $11m to $13m, signaling a confidently positive earnings trajectory.
- DMX Asset Management views RPM’s debt as manageable given substantial tangible assets and improving earnings guidance.
- Investor engagement efforts, including an upcoming open day, align with RPM’s positive outlook.
- RPM’s non-core businesses may provide options for strengthening the balance sheet if needed.
- DMX Asset Management holds a ~2% portfolio position citing attractive valuation metrics compared to potential earnings growth.
- A sentiment shift could lead to a strong multiple re-rate given improving fundamentals.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Frequently Asked Questions
Who is investing in Rpm Automotive Group Ltd (ASX:RPM)?
Fund managers including DMX Asset Management have invested in Rpm Automotive Group Ltd (ASX:RPM).
Why do fund managers invest in Rpm Automotive Group Ltd?
Fund managers invest in RPM Automotive Group Ltd due to its promising growth prospects and innovative recycling operations. The company is transitioning from incurring costs for used tire disposal to generating revenue through tire recycling. RPM's forecasted EBITDA of $12m-$13m and net profit after tax (NPAT) of $5m-$6m highlight its financial potential. With a market cap of $16m and a low price-to-earnings ratio, RPM offers an attractive risk/reward profile. Its substantial national footprint and continued expansion plans further enhance its investment appeal.
What happened to Rpm Automotive Group Ltd (ASX:RPM)?
There have been no recent updates from fund managers regarding Rpm Automotive Group Ltd although fund managers including DMX Asset Management have previously commented.
What is the short interest in Rpm Automotive Group Ltd (ASX:RPM)?
According to ASIC filings, there is negligible or no short interest in Rpm Automotive Group Ltd (ASX:RPM).
What does Rpm Automotive Group Ltd (ASX:RPM) do?
RPM Automotive Group Ltd. manufactures parts and accessories for motor vehicles. The firm operates in the four divisions of the Australian automotive market, such as Motorsport, Tires & Wheels, Repairs & Roadside, and Performance & Accessories. The company was founded by Clive Finkelstein and Lawrence Jaffe on October 20, 1982 and is headquartered in Dandenong South, Australia.