Ongoing inflationary pressures will not impact online car retailer Cazoo, its chief executive Alex Chesterman said yesterday.
“Used cars have historically [pushed] in a recessionary environment, while new cars tend to be much more affected,” Chesterman told analysts during a call. “[New cars] are a luxury purchase whereas used cars are functional.”
The company said 2021 had been a record year, as revenues rocketed 312 per cent to £668m while gross profits increased to £25m, up from a £3m loss recorded in 2020.
In the 12 months ended 31 December, Cazoo’s sales went up 233 per cent, with 49,853 vehicles sold.
Sales were driven by the consolidation of UK operations and an expansion in the EU key markets of France, Italy, Germany and Spain.
“Together with the UK, these five key markets have a combined total addressable market of over £300bn and our long-term target is to capture a 5 per cent market share, which is why we are extremely energised by our future growth opportunities,” Chesterman added.
Launched in December 2019, Cazoo recently made the headlines when it bought Spanish marketplace Swipcar in a €30m deal before moving on to acquire Italian rival Brumbrum for €80m.
The retailer said it had managed to advance its strategy by bringing the UK vehicle reconditioning business in house as well as by launching an online channel to purchase cars directly from consumers.
“The investment we have made in our in-house infrastructure will be pivotal to our ability to grow materially over the coming years whilst maintaining the high quality experience that our customers love,” he said.
Increased sales and operational efficiencies led to UK retail gross profit per unit to go up to £427 from a loss of £229 in 2020.
“Our strong growth in 2021 combined with the strategic building blocks that we have put in place, including our significant funding, means that we are very well positioned to deliver on our ambitious growth plans.”
According to chief financial officer Stephen Morana, the current cash position of £193m gives the company a “a clear runway for at least the next 24 months to execute on our ambitious strategy, and by which stage we believe our UK business will reach profitability.”