Record Retail GPU of £980 in Q1 2023 (over
£1,200 in March) Business restructuring complete
Strong cash position
- Record Retail GPU of £980 in Q1, up 690% YoY, ahead of
expectations
- Achieved new record level of Retail GPU of over £1,200 in
March
- Q1 2023 revenue and retail unit sales in line with
expectations
- Gross profit of £14 million in Q1, up 367% YoY, with
improved margins
- Strong cash position with over £215 million as at the end of
Q1 2023
- FY 23 guidance reiterated as performance improvement
continues
Cazoo Group Ltd (NYSE: CZOO) (“Cazoo” or “the Company”), the
UK’s leading independent online car retailer, which makes buying
and selling a car as simple as ordering any other product online,
today announces its financial results for the three months ended
March 31, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20230427005033/en/
Cazoo Single Transporter (Photo: Business
Wire)
Paul Whitehead, Chief Executive Officer of Cazoo,
commented, “I am very pleased with our performance in the first
quarter of 2023. Our focus on unit economics, together with the
restructuring changes, is starting to bear fruit as evident in the
significant improvement in Retail GPU to £980 in Q1 2023. Whilst
the broader economic environment remains challenging, demand was
robust in the quarter and we sold 13,314 retail cars as our online
proposition continues to resonate with consumers due to the
selection, transparency and convenience of using our platform.
“We remain laser-focused on improving our unit economics,
optimizing our fixed cost base and maximizing our cash runway. In
Q1 2023, we delivered positive progress to further increase our
Retail GPU with continued quarterly sequential growth in Retail GPU
of 64% (up 690% YoY) and are very encouraged to have already
achieved over £1,200 in March, which we set as our target for the
full year.
“We are applying a more targeted approach to which vehicles we
buy, guided by our proprietary data of their desirability, with a
better selection of models available on our website driving better
margins. During the quarter, a record 52.5% of buyers (up from
47.4% in Q1 2022) arranged financing directly through our platform
entirely online, as we saw more applications together with better
customer quality and higher acceptance rates. Reconditioning costs
have continued to improve following the consolidation of our
vehicle preparation centres and the relentless drive for greater
efficiency from the team. We expect to see further progress across
both these areas as well as across logistics spend and marketing
effectiveness.
“Our cash position remains strong with £215 million1 of cash and
cash equivalents and approximately £60 million of self-financed
inventory. During the quarter, we took the difficult decision to
reduce our headcount materially in order to optimize our fixed
costs which resulted in c.£13 million of one-off costs. We expect
to see a reduction in SG&A2 run rates of over £25 million per
quarter by Q4 2023, representing over £100 million of annualised
savings going into 2024. As we guided previously, the cash
utilization rate is expected to reduce to approximately £30 million
per quarter by the end of the year, and we anticipate finishing the
year with between £110 million and £130 million of cash and between
£15 million and £25 million of self-financed inventory. We
reiterate our guidance for 2023 and remain fully focused on
delivering profitable growth.”
Summary Results
Three months ended
March 31,
2023
(unaudited)
20221
(unaudited)
Change
Vehicles Sold
17,447
18,679
-7%
Retail
13,314
12,844
4%
Wholesale
4,133
5,835
-29%
Revenue (£m)2
247
279
-11%
Retail (£m)2
222
234
-5%
Wholesale (£m)
21
36
-42%
Other (£m)
4
9
-56%
Retail GPU (£)3
980
124
690%
Gross Profit (£m)
14
3
367%
Gross Margin (%)
5.8%
1.1%
+4.7 ppts
Cash and cash equivalents (£m)4
215
525
-58%
1 The Q1 2022 comparatives have been
restated to exclude the EU segment which is treated as a
discontinued operation.
2 “Retail revenue” excludes £nil of sales
in Q1 2023 where Cazoo sold vehicles as an agent for third parties
and only the net commission received from those sales is recorded
within revenue (Q1 2022: £1 million). Retail revenue also comprises
ancillary products, including financing and warranty. These amounts
were previously included in “Other sales”. “Other sales” comprises
revenue from walk-in servicing, subscription services, third-party
reconditioning and the provision of data services. The comparatives
for Q1 2022 have been restated for consistency.
3 Retail GPU (Gross Profit per Unit) is
derived from UK retail and ancillary product revenues, divided by
UK retail units sold (net of returns).
4 The balance excludes £6.4 million of
cash related to assets held for sale in relation to the announced
sale of Cluno, as Cazoo has been paid for Cluno but the transaction
has not yet completed with its balance sheet still being
consolidated.
First Quarter 2023 Financial and Strategic highlights
- Revenue of £247 million in line with expectations
- Retail units sold up 4% YoY, to 13,314 supported by strong
momentum and inventory levels
- Retail GPU up 64% QoQ to £980 (Q4 2022: £596) following focus
on unit economics
- Gross profit of £14 million, with a gross margin of 5.8% (Q4
2022: 1.3%)
- Ancillary revenue per retail unit sold up 10% YoY to £708 due
to the improvement in our proposition
- Finance attachment rate further increased to 52.5% (Q4 2022:
51.5%)
- Headcount and operational footprint rightsizing as part of
Revised 2023 Plan complete
- SG&A savings expected to flow through from Q2-Q3 2023
- Cash & cash equivalents of £215 million4 as of March 31,
2023 (December 31, 2022: £258 million)
- Self-financed inventory of ~£60 million as of March 31, 2023
(December 31, 2022: ~£75 million)
- Outlook for 2023 reiterated:
- 50,000-60,000 total unit sales, of which 40,000-50,000 Retail
units
- Full-year Retail GPU approaching £1,200
- 2023 Retail GPU exit rate approaching £1,500
- Adjusted EBITDA of (£100) to (£120) million
- Cash & cash equivalents at the end of 2023 of £110 to £130
million
Conference Call
Cazoo will host a conference call today, April 27, 2023, at 8
a.m. ET. Investors and analysts interested in participating in the
call are invited to dial 1-877-704-6255, or for international
callers, 1-215-268-9947. A webcast of the call will also be
available on the investor relations page of the Company’s website
at https://investors.cazoo.co.uk.
About Cazoo - www.cazoo.co.uk
Our mission is to transform the car buying and selling
experience across the UK by providing better selection, value,
transparency, convenience and peace of mind. Our aim is to make
buying or selling a car no different to ordering any other product
online, where consumers can simply and seamlessly buy, sell or
finance a car entirely online for delivery or collection in as
little as 72 hours. Cazoo was founded in 2018 by serial
entrepreneur Alex Chesterman OBE and is a publicly traded company
(NYSE: CZOO).
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the “safe harbour” provisions of the Private
Securities Litigation Reform Act of 1995. The expectations,
estimates, and projections of the business of Cazoo may differ from
its actual results and, consequently, you should not rely on
forward-looking statements as predictions of future events. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,”
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to: (1) the implementation of and expected benefits from
our business realignment plan, the winddown of operations in
mainland Europe, the revised 2023 plan, and other cost-saving
initiatives; (2) reaching and maintaining profitability in the
future; (3) global inflation and cost increases for labor, fuel,
materials and services; (4) geopolitical and macroeconomic
conditions and their impact on prices for goods and services and on
consumer discretionary spending; (5) having access to suitable and
sufficient vehicle inventory for resale to customers and
reconditioning and selling inventory expeditiously and efficiently;
(6) availability of credit for vehicle and other financing and the
affordability of interest rates; (7) increasing Cazoo’s service
offerings and price optimization; (8) effectively promoting Cazoo’s
brand and increasing brand awareness; (9) expanding Cazoo’s product
offerings and introducing additional products and services; (10)
enhancing future operating and financial results; (11) achieving
our long-term growth goals; (12) acquiring and integrating other
companies; (13) acquiring and protecting intellectual property;
(14) attracting, training and retaining key personnel; (15)
complying with laws and regulations applicable to Cazoo’s business;
and (16) other risks and uncertainties set forth in the sections
entitled “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in the Reports on Form 20-F filed with
the U.S. Securities and Exchange Commission (the “SEC”) by Cazoo
Group Ltd on March 30, 2023 and in subsequent filings with the SEC.
The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the disclosure
included in other documents filed by Cazoo from time to time with
the SEC. These filings identify and address other important risks
and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and Cazoo assumes no obligation and
does not intend to update or revise these forward-looking
statements, whether as a result of new information, future events,
or otherwise. Cazoo gives no assurance that it will achieve its
expectations.
1 The balance excludes £6.4 million of
cash related to assets held for sale in relation to the announced
sale of Cluno, as Cazoo has been paid for Cluno but the transaction
has not yet completed with its balance sheet still being
consolidated.
2 SG&A means Selling, General and
Administrative expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005033/en/
Investor Relations: Cazoo: Anna Gavrilova, Head of
Investor Relations, investors@cazoo.co.uk ICR: cazoo@icrinc.com
Media: Cazoo: Lawrence Hall, Group Communications
Director, lawrence.hall@cazoo.co.uk Brunswick: Chris
Blundell/Simone Selzer +44 20 7404 5959 /
cazoo@brunswickgroup.com
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