Cazoo Announces Second Quarter and First Half 2022 Financial Results
Cazoo Group Ltd (NYSE: CZOO) reported a record Q2 revenue of £333 million, a 145% year-over-year increase, driven by significant sales growth. Units sold surged 124% to 23,955. The company’s UK retail gross profit per unit improved markedly to £309, reflecting operational efficiencies. A strategic review of the EU business is underway, and a focus on cash preservation remains. The cash position stands strong at over £400 million. However, Cazoo faces challenges with NYSE listing compliance, having received a notice regarding share price requirements.
- Q2 revenues increased 145% YoY to £333 million.
- Units sold rose by 124% year-over-year to 23,955.
- UK retail gross profit per unit improved to £309, up 150% from Q1 2022.
- Strong cash position with over £400 million available.
- Received notice of non-compliance with NYSE listing standards due to share price issues.
Q2 Revenues up
-
Record revenues of
£333m in Q2, up145% YoY driven by substantialUK retail sales growth -
Vehicles sold up
124% YoY to 23,955 in Q2 as market share continues to grow considerably -
Retail units sold in Q2 at record 17,033, up
94% YoY despite the tough economic backdrop -
Material improvement to
UK Retail GPU in Q2 at£309 , up by£185 in comparison to Q1 2022 -
Considerable progress in
UK reconditioning capability resulting in record website inventory - Realignment plan successfully implemented and strategic review of EU business underway
-
Appointment of
Paul Woolf to succeedStephen Morana as Chief Financial Officer in Q4 2022 -
Balance sheet remains strong with over
£400m of cash and£175m of self-financed inventory - Remain focused on cash preservation and materially reducing additional funding requirement
Alex Chesterman OBE, Founder & CEO of
Despite having launched only two and half years ago, we have now sold over 80,000 retail units entirely online, including over 30,000 in the first half of this year and we achieved record revenues in H1 of
Whilst our growth remains very robust, we are laser-focused on maintaining our strong balance sheet, preserving cash and materially reducing the need for further funding as we drive towards profitability. We are encouraged by the positive trajectory of our
I am particularly pleased that despite the weak economic environment affecting growth in other retail businesses and sectors, we have maintained our strong momentum into Q3 with record retail unit sales and revenues in July, whilst also growing our
Our balance sheet remains strong with over
Whilst our Q1
Summary Results | ||||||||||||
|
Six months ended
|
|
Three months ended
|
|
||||||||
|
2022
|
2021
|
Change |
2022
|
2021
|
Change |
||||||
Vehicles Sold |
43,668 |
20,454 |
+ |
23,955 |
10,692 |
+ |
||||||
Retail |
30,386 |
16,557 |
+ |
17,033 |
8,772 |
+ |
||||||
Wholesale |
13,282 |
3,897 |
+ |
6,922 |
1,920 |
+ |
||||||
Revenue (£m)1 |
628 |
248 |
+ |
333 |
136 |
+ |
||||||
Retail (£m)1 |
502 |
208 |
+ |
271 |
112 |
+ |
||||||
Wholesale (£m) |
83 |
13 |
+ |
41 |
7 |
+ |
||||||
Other (£m)1 |
43 |
27 |
+ |
21 |
17 |
+ |
||||||
|
226 |
315 |
(89) |
309 |
467 |
(158) |
||||||
Gross Profit (£m) |
3 |
11 |
(8) |
2 |
8 |
(6) |
||||||
Gross Margin (%) |
|
|
(4.1)%pts |
|
|
(5.1)%pts |
||||||
Loss for the period (£m) |
(243) |
(102) |
(141) |
|
|
|
||||||
Adj. EBITDA (£m)3,4 |
(175) |
(69) |
(106) |
|
|
|
||||||
Adj. EBITDA Margin (%)5 |
( |
( |
+ |
|
|
|
1 | Retail revenue’ excludes |
|
2
|
||
3
|
|
Adjusted EBITDA is defined as loss for the period, adjusted for tax, finance income/expense, depreciation, amortization and impairment of intangible assets, share based payment expense, fair value movement and foreign exchange movement in warrants and convertible notes and exceptional items. |
4 |
For a reconciliation to the most directly comparable measure under International Financial Reporting Standards (“IFRS”) see the section titled “Adjusted EBITDA Reconciliation”. | |
5 |
Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to Revenue. |
First Half 2022 Financial and Strategic highlights
-
Record revenues of
£628 million , up153% YoY, driven by strong retail revenue growth -
Vehicles sold up
113% YoY to 43,668 as the Company’s strong growth trajectory continued -
UK Retail GPU of£226 , impacted by H2 2021 investments in reconditioning and car buying launch -
Continued to improve reconditioning capabilities with record
UK website inventory atJune 30, 2022 -
Raised
from the issuance of convertible notes to support continued investment in growth$630 million
Second Quarter 2022 Financial and Strategic highlights
-
Revenue up
145% YoY to£333 million , driven by strong retail and wholesale revenue growth -
Vehicles sold up
124% YoY to 23,955 as demand continues to grow despite a tough economic backdrop -
UK Retail GPU of£309 in Q2 2022, 2.5x higher than Q1 2022 as we generate efficiencies across business -
Strong momentum from car buying channel with over
30% of retail sales sourced directly from consumers -
Successfully implemented realignment plan to right-size the business and position us for profitable growth
Cash flow and liquidity
-
Cash position of
£401m as ofJune 30, 2022 , and over£175m of self-financed inventory -
Capital expenditure was
£33m in H1 2022 as the Company invested further in its infrastructure - It is anticipated that capex spend will be lower in H2 as was weighted heavily to the first half of the year
-
Net outflow of
£70m to fund vehicles during H1 2022 which is expected to be partially financed in H2 -
Approximately
£80m of cash-financed inventory will be realised over next 18m from subscription inventory
Current trading and outlook
We are very pleased by our strong performance in Q2 and remain confident in achieving the guidance for the year that we set out with the announcement of the realignment plan on
Our business realignment plan is progressing well, and we remain laser focused on profitability and cash generation. In that context, we are currently conducting a strategic review of our business in mainland
The
Chief Financial Officer Change
The Company today also announces the appointment of
Alex Chesterman OBE, Founder & CEO of
Conference Call
https://investors.cazoo.co.uk.
Continued Listing Standards
The Company received a notice on
On
The Company’s Class A ordinary shares will continue to be listed and trade on the NYSE during this period, subject to the Company’s compliance with other NYSE continued listing standards. The Company’s receipt of the notice does not affect the Company’s business, operations or reporting requirements with the
About
Our mission is to transform the car buying and selling experience across the
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
Cautionary Statement
The financial results for the three and six months ended
Non-IFRS Financial Measures
This release includes certain financial measures not based on IFRS, including Adjusted EBITDA and Adjusted EBITDA Margin (together, the “Non-IFRS Measures”)
In addition to Cazoo’s results determined in accordance with IFRS, the Company believes that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information for management and investors to assess the underlying performance of the business as they remove the effect of certain non-cash items and certain charges that are not indicative of Cazoo’s core operating performance or results of operations.
Adjusted EBITDA and Adjusted EBITDA Margin are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other IFRS financial measures, such as loss for the period. Some of the limitations of Adjusted EBITDA and Adjusted EBITDA Margin include that they do not reflect the impact of working capital requirements or capital expenditures and other companies in Cazoo’s industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently, or use a different accounting standard such as
Adjusted EBITDA is defined as loss for the period adjusted for tax, net finance expense, depreciation, amortization and impairment of intangible assets, share-based payment expense, fair value movement and foreign exchange movement in warrants and convertible notes and exceptional items.
Adjusted EBITDA margin is defined as the ratio of Adjusted EBITDA to revenue.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME | ||||||
For the six months ended: | ||||||
|
|
Jun-22 |
|
Jun-21 |
|
Change |
|
|
£'m |
|
£'m |
|
£'m |
Revenue1 |
|
628 |
|
248 |
|
380 |
Cost of sales |
|
(625) |
|
(237) |
|
(388) |
Gross profit |
|
3 |
|
11 |
|
(8) |
|
|
|
|
|
|
|
Marketing expenses |
|
(45) |
|
(29) |
|
(16) |
Selling and distribution expenses |
|
(57) |
|
(20) |
|
(37) |
Administrative expenses2 |
|
(288) |
|
(70) |
|
(218) |
Loss from operations2 |
|
(387) |
|
(108) |
|
(279) |
|
|
|
|
|
|
|
Net finance expense3 |
|
(22) |
|
(1) |
|
(21) |
Other income and expenses4 |
|
158 |
|
- |
|
158 |
|
|
|
|
|
|
|
Loss before tax |
|
(251) |
|
(109) |
|
(142) |
|
|
|
|
|
|
|
Tax credit |
|
8 |
|
7 |
|
1 |
|
|
|
|
|
|
|
Loss for the period |
|
(243) |
|
(102) |
|
(141) |
1 | Revenue excludes |
|
2 | Current period includes a non-cash impairment charge of |
|
3 | Current period includes |
|
4 | Other income and expenses includes fair value movement and foreign exchange movement in warrants and convertible notes |
ADJUSTED EBITDA RECONCILIATION | ||||
Reconciliation of loss for the period to adjusted EBITDA |
||||
|
|
Jun-22 |
Jun-21 |
|
|
|
£'m |
£'m |
|
Loss for the period |
|
(243) |
(102) |
|
|
|
|
|
|
Adjustments: |
|
|
|
|
Tax credit |
|
(8) |
(7) |
|
Net finance expense |
|
22 |
1 |
|
Depreciation, amortization and impairment of intangible assets1 |
|
169 |
15 |
|
Share-based payment expense |
|
35 |
13 |
|
Fair value movement and foreign exchange movement in warrants and convertible notes |
|
(158) |
- |
|
Exceptional items2 |
|
8 |
11 |
|
Total adjustments |
|
68 |
33 |
|
|
|
|
|
|
Adjusted EBITDA |
|
(175) |
(69) |
1 |
Current period includes a non-cash impairment charge of |
|
2 |
Exceptional items include restructuring costs of |
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||
As at: | ||||
|
|
Jun-22 |
|
Dec-21 |
|
|
£'m |
|
£'m |
|
|
|
|
|
Property, plant and equipment and right-of-use assets1 |
|
363 |
|
273 |
|
|
195 |
|
262 |
Inventory2 |
|
374 |
|
365 |
Cash and cash equivalents |
|
401 |
|
193 |
Other net working capital |
|
(40) |
|
- |
Loans and borrowings (current)3 |
|
(222) |
|
(181) |
Loans and borrowings (non-current)3 |
|
(63) |
|
(68) |
Convertible notes and embedded derivative |
|
(360) |
|
- |
Warrants |
|
(6) |
|
(43) |
Lease liabilities |
|
(120) |
|
(90) |
Net assets |
|
522 |
|
711 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital, share premium and merger reserve |
|
1,347 |
|
1,323 |
Retained earnings |
|
(827) |
|
(611) |
Foreign currency translation reserve |
|
2 |
|
(1) |
Total equity |
|
522 |
|
711 |
1 | Property, plant and equipment and right-of-use assets includes |
|
2 |
Inventory consists of vehicles purchased, direct and indirect vehicle reconditioning costs, including parts and labor and inbound transportation costs. Inventory includes vehicles which have been ordered but not delivered which remain in inventory until the revenue is recognized | |
3 |
Loans and borrowings (current and non-current) for the current period comprises entirely of stocking loans and facilities used to finance subscription vehicles (Dec-21: |
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||
For the six months ended: | ||||
|
|
Jun-22 |
|
Jun-21 |
|
|
£'m |
|
£'m |
Cash flows from operating activities: |
|
|
|
|
Loss for the period |
|
(243) |
|
(102) |
Adjustments for: |
|
|
|
|
Tax credit |
|
(8) |
|
(7) |
Net finance expense |
|
22 |
|
1 |
Depreciation, amortization and impairment of intangible assets1 |
|
169 |
|
15 |
Share-based payment expense |
|
35 |
|
13 |
Fair value movement in warrants and convertible notes |
|
(158) |
|
- |
|
|
(183) |
|
(80) |
Movement in inventory |
|
(8) |
|
(12) |
Movement in subscription vehicles |
|
(62) |
|
- |
Other working capital movements |
|
38 |
|
37 |
Net cash used in operating activities |
|
(215) |
|
(55) |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(18) |
|
(35) |
Purchases and development of intangible assets |
|
(15) |
|
(5) |
Acquisition of subsidiaries, net of cash acquired |
|
(34) |
|
(80) |
Other investing activities |
|
18 |
|
- |
Net cash used in investing activities |
|
(49) |
|
(120) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Net proceeds from issue of convertible loan notes |
|
460 |
|
- |
Vehicle financing activities |
|
29 |
|
(1) |
Other financing activities |
|
(24) |
|
(8) |
Net cash from financing activities |
|
465 |
|
(9) |
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
201 |
|
(184) |
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
|
193 |
|
244 |
Net foreign exchange difference |
|
7 |
|
- |
|
|
|
|
|
Cash and cash equivalents at the end of the period |
|
401 |
|
60 |
1 |
Current period includes a non-cash impairment charge of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220802005317/en/
Investor Relations:
ICR: cazoo@icrinc.com
Media:
Source:
FAQ
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