Troubled used car seller Cazoo warns of ‘volatile’ demand as revenues halve
Used car seller Cazoo’s revenues halved in the third quarter, as the troubled retailer continues its restructuring following years of share price struggles.
Revenues fell to £173m, down from £347m in the three months to September, alongside a 50 per cent dip in the number of vehicles sold to 12,021.
In a statement today, Cazoo said it expects to post a £100m to £120m loss this year, while it warned of “volatile” demand for used cars. The company did not disclose its losses for the quarter, in line with NYSE requirements.
The London-headquartered but New York-listed firm is undergoing a significant restructuring under new boss Paul Whitehead, following years of sub-par performance since its 2021 listing.
That restructuring has made some headway, despite challenges in the wider market. Cazoo reported £11m in quarterly gross profit today, an increase of 10 per cent year-on-year and up nearly 40 per cent on the previous quarter.
Revenues also rose marginally when compared with the previous quarter, up 1.2 per cent.
But shares are down nearly 90 per cent this year to date and fell nearly five per cent on today’s announcement.
This year’s share price is little better than the huge 95 per cent fall reported in 2022, when the company laid off hundreds of staff and pulled out of its operations in the European Union (EU).
Chief executive Paul Whitehead said: “Despite the challenging economic environment with increased interest rates and higher costs of living, our online value proposition continues to appeal to consumers as we sold 9,525 retail vehicles in Q3, and delivered further improvement in Retail GPU.”
Cazoo looked to be turning a corner after a solid set of results in early August, but shares crashed last month when it announced a $630m debt-for-equity swap as part of its deep financial restructuring.
Whitehead said: “During the quarter, we continued to reduce both fixed and variable costs in line with expectations, leading to lower cash utilization.”
“Our cash position remains strong with £151m of cash and cash equivalents plus approximately £35m of self-financed inventory.”