Cazoo no you can’t: Motor retailer halves ambitions despite third quarter sales fillip
Cazoo has halved its sales ambitions for the year, saying it was now looking to sell between 40,000 and 50,000 cars, rather than the predicted 80,000 to 100,000.
The online car retailer told analysts and investors it was shrinking its ambitions to a “more modest” top line, as it sought to return to profitability without the need for further funding from investors over the next 18 to 24 months.
Cazoo said reducing the volumes of cars sold would allow it to focus on higher value vehicles and improve its growth per unit (GPU) from the current £600 to £1,500 by the end of 2023.
Alex Chesterman, chief executive of Cazoo said: “Whilst 2022 was a challenging year in many respects, our continued strong growth, notable improvement in unit economics during each quarter and market-leading consumer feedback gives us strong confidence in the long-term opportunity for Cazoo.”
Cazoo was forced to revise its business plan after reporting a £243m half-year loss in August, as a result it ,offloaded its European operations – cutting 750 jobs – and focused solely on the UK.
Chesterman added: “We also remain on track and on budget with our withdrawal plan from the EU, having disposed of our Italian and Spanish businesses and largely wound down our French and German operations in the fourth quarter 2022.”
Chesterman – who founded the New York-listed company in 2018 – also announced he would remain on board as full-time executive chairman, handing the CEO reins to Cazoo’s chief operating officer Paul Whitehead.
From 1 April, the splitting of operations will allow Chesterman to focus on the retailer’s “strategic direction,” leaving Whitehead to oversee Cazoo’s day-to-day operations.
The news comes as Cazoo reported a 100 per cent increase in sales in the three months ended 31 December.
In the fourth quarter of last year, the used car retailer sold around 17,750 vehicles for a total of around £315m.
“We had another strong quarter of UK retail unit sales, up over 100 per cent year-on-year, and we have now sold well over 100,000 cars entirely online in the UK in just 3 years since our launch,” added Chesterman.