NTAW offloads loss-making Black Rubber WA operations to Get A Grip Tyres in a back-to-basics push

Brisbane-based tyre and wheel importer NTAW Holdings (ASX: NTD) is selling the Western Australian assets of its loss-making Black Rubber tyre business and offloading its 50 per cent stake in South African subsidiary Tyrelife Solutions as the group moves to stem financial losses that ballooned to $10.73 million in the first half of FY2026.

The WA asset sale to Get A Grip Tyres is valued at $1.2 million excluding inventory, with an estimated $2.5 million for stock on hand.

Separately, NTAW is selling its Tyrelife Solutions (TLS) shareholding to the subsidiary's managing director Georg Schramm for $729,564, payable in instalments over two years.

The twin divestments form part of a broader restructuring by Australia and New Zealand's largest independent tyre and wheel wholesaler, which reported a 12.3 per cent fall in revenue to $225.8 million in the December half year.

Black Rubber alone accounted for $9 million of that revenue decline, driven by store closures and the loss of market share in Western Australia.

“Selling our interest in TLS is in the best interests of both companies as TLS no longer fits within NTD’s strategic objective of being Australia and New Zealand’s primary independent tyre and wheel wholesale business," says NTAW chief executive Warwick Hay.

"The sale decreases NTD’s risk profile and enables us to focus on the continued reset and profitable growth of our core Australian and New Zealand businesses.”

Black Rubber and Black Rubber Retreading currently operate commercial tyre retail stores in Perth, Port Hedland, Adelaide, Melbourne, Sydney and Brisbane, and retread manufacturing facilities in Perth, Melbourne, Sydney and Brisbane.

NTAW Holdings acquired WA-based Black Rubber in November 2021 with a strategy to expand its commercial tyre retail and retreading businesses from WA to Australia’s eastern seaboard.

This included converting retail stores in NTAW's Tyreright operations and businesses acquired from Goodyear into Black Rubber outlets.

The company says Black Rubber's WA operations in recent years experienced declining revenues due to a "disjointed market and management and service issues".

"Combined with high fixed costs, this caused the WA operations to miss profit targets and incur substantial losses," says the company.

"The loss-making WA operations, together with the costs associated with Black Rubber's expansion, resulted in a substantial impairment of the Black Rubber intangible assets in December 2024."

Proceeds from the sale will be directed toward working capital for Black Rubber's continuing operations on the eastern seaboard.

The WA deal includes a provision for Michelin to exercise a buy-back right over retread assets, which would reduce the $1.2 million headline price by the value of those assets.

NTAW's exit from South Africa marks a strategic narrowing of the group's geographic footprint.

TLS, which operates in the South African tyre market, had been a 50 per cent-owned subsidiary but was deemed non-core as the company sharpened its focus on the Australian and New Zealand wholesale market.

The divestments come as NTAW navigates a difficult financial period highlighted by its lender Commonwealth Bank last month waiving financial covenant defaults through to December this year while NTAW works to repair its balance sheet.

The group's net debt stood at $50.6 million at the end of December last year. The company says it has repaid $13.2 million of its borrowing facility since 30 June last year.

NTAW's half-year net loss of $10.73 million underscores the urgency of the restructuring effort, with the group signalling that shedding underperforming and non-core assets is central to its path back to profitability.

“The sale of BR’s WA operations is an important step in our ‘back to basics’ strategy for NTD’s retail tyre businesses," says Hay.

"This strategy involves restructuring the BR head office, having the eastern seaboard retail stores focus on regional vehicle fleets, and shifting responsibility for large national vehicle fleets to National Tyre & Wheel Pty Ltd, our wholesale business.”

The sale of the WA assets to Get A Grip Tyres is expected to be completed by 31 August 2026. 

The deal remains subvject to several conditions including the landlords of the Kewdale and Port Hedland premises consenting to an assignment of the leases to Get A Grip Tyres as well as Michelin agreeing to release Black Rubber from an agreement relating to the Kewdale premises and the Retread Assets.