MaxiPARTS Limited

MaxiPARTS (ASX: MXI) is a distributor of truck parts and associated consumables for truck operators and mechanics. The business has been trading under this name since May 2013 but has been operating for over 30-years under three separate names being Colrain, Queensland Diesel Spares and Gladstone Air Cleaner Services. It’s worth noting that prior to 2021 MaxiPARTS was part of Maxitrans which was predominantly focused on manufacturing truck trailers. As the trailer division was inherently volatile and capital intensive, the decision was made to divest the trailer division and focus wholly on the parts division which had produced positive results despite being starved of capital due to the requirements of the trailer division.

Today, MXI is the third largest independent distributor of truck parts, operating from 29 sites across Australia with FY23 revenues surpassing $200 million for the first time. It’s latest FY24 guidance has the business producing circa $10m of NPBT on Sales between $239-244 million.  

At any one time, Maxiparts provides customers access to over 19,000 truck parts necessary for daily operations. Within these 29 locations across 5 states, MXI focuses on selling replacement axles, suspensions, wheels, brakes, and trailer products to a vast range of truck customers (fleet operators, individuals, workshops & trailer manufacturers). The recent acquisitions of both Truckzone and Förch Australia have enhanced MXI’s product range which now includes North American & Japanese commercial vehicles as well as providing an adjacent range of consumable products to automotive/commercial vehicle workshops. This consumable product range in our opinion offers MXI a substantial future revenue opportunity to hopefully grow into. Finally, MXI acquired Independent Parts in Western Australia, a truck & trailer parts distributor that grants exposure to high value customers in the commodity logistics sector.

Our investment thesis for MXI is centred around the numerous levers that MXI has available to grow earnings, together with the significant valuation multiple discrepancy that MXI has relative to its listed peers such as SNL. MXI operates with several long term market dynamics that should assist in its growth. The specialist independent aftermarket part distributors for trucks is a consolidating industry, which has the central tailwind of Australia’s ageing trucking fleet (the trend of which can be seen in the below graph). As Australia’s fleet life is extended further & further, the time and cost savings fleet operators/drivers reap by going to utilising aftermarket parts, providers a structural growth backdrop for the three largest operators in the space, Bapcor (ASX: BAP), Supply Networks (ASX: SNL) and MaxiPARTS (ASX: MXI).

Maxiparts Distribution Centre/Head Office, Truganina Melbourne (Source: Maxiparts Limited)

Australia’s Aging Truck Fleet