G.U.D. Holdings slipped over 20% post the release of its trading update

G.U.D. Holdings Limited (ASX: GUD) has provided trading update that outlined constant momentum in the legacy automotive businesses along with a positive start to the Vision X and APG acquisitions. GUD achieved this despite increased operating challenges and costs linked to the supply chain.

Since the Investor Day, GUD legacy Automotive businesses witnessed strong demand. The strategically increased inventory levels have been supportive of aftermarket sales growth.  Supply chain lead remained elevated and, in a few cases, it even increased since the April update.

However, businesses that mainly serve new vehicle sales, particularly APG noted a significant slowing in offtake from OEM customers through the later part of April and in May 2022. The new car registrations dropped 12.2% in April 2022 and 6.4% in May 2022 compared to the previous corresponding period.

Lately, volatility in new vehicle supply has increased. As a result of supply constraints, there was a year over year new vehicle sales drops due to increase in order backlogs. It is negatively impacting APG, ECB and CSM sales in the short term.

Costs continue to be challenging. However, the price increases have been rolled out throughout all businesses to safeguard margins.

As a result of these challenges, GUD has lowered its FY22 Underlying EBITA of ~AU$147 million which was previously in between AU$155 million and AU$160 million.

At AEST 11:40 AM, GUD shares are trading at AU$7.650, down 20.395% from its previous close. 

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