Cazoo remains “laser focused” on long-term strategy despite ongoing macroeconomic headwinds, its chief executive Alex Chesterman said today.
The online car retailer announced that quarterly revenues soared 159 per cent, less than a month after the online car retailer posted profits worth £25m for the year ended 31 December.
In the first three months of 2022, the company reported revenues worth £259m, while the number of vehicles sold surged 102 per cent on 2021 levels.
Short-term financial performance, the group said, was impacted by investments made in the second half of 2021, including the decision to bring the UK’s car reconditioning business in house.
Over the last few months, Cazoo also completed a series of acquisitions – including Italian online retailer brumbrum for €80 and Barcelona-based rival Swipcar for €30m.
Even though quarterly profits per car unit went down 19 per cent and overall gross profit declined from £4m to £2m due to the recent investments, the retailer said they would improve as the number of cars ready to be sold by Cazoo trebled to 6,000.
“As we advance through 2022 we aim to continue to ramp up our reconditioning capacity which we expect to lead to further growth and allow us to continue our progress towards our long-term market share ambitions,” Cazoo’s chief executive Alex Chesterman told analysts today while outlining his targets to capture a 5 per cent of the market’s share.
“The market opportunity is so large that with just a low single digit market share would have an enormous business,” he added.
According to both Chesterman and chief financial officer Stephen Moran, headwinds – including pandemic-induced supply chain issues and the Ukraine war’s impact on material and transport costs – will have “little bearing” on the company’s overall performance.
The results come less than a month after the online car retailer posted record results for 2021, with revenues rocketing 312 per cent to £668m, City A.M. reported.
Analysts believe that Cazoo’s success story was supported by automotive output levels going down as a result of supply chain issues.
“With supply chain worries set to continue with China’s COVID-19 lockdowns and the chip shortage unlikely to ease before 2023, Cazoo will continue to benefit as it expands further into Europe,” automotive analyst Emilio Campa told City A.M.