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Carsales (CAR) $21.75

Carsales (CAR) -1.58%: a solid result with reported revenue for the half of $199m, which was smack on expectations while there was a small beat in terms of EBITDA and net profit, largely around better cost management. Of the $199m in revenue, the dealer network accounted for $87m of it, which was up 10% YoY – there was some rebates paid here but top line was reasonable. Private sales accounted for $33.6m of the revenue, that was down -24% YoY but again, inline with expectations and not a great surprise given lockdowns and social distancing regs.  Display revenues were $19.2m, down 12% YoY and the rest is international, Sth Korea +23% YoY and Latam +11% YoY all doing okay.

They also provided a January trading update saying trends were much the same as they exited calendar 2020 i.e. good.  They then went on to provide customarily vague guidance, forecasting ‘moderate’ adjusted revenue growth and ‘solid’ adjusted EBITDA and profit growth guidance. If we make some assumptions here around what moderate (high single digits) and solid means (mid double digits) then the markets current expectations for profit of $142m are about right hence the muted share price reaction today.

MM are neutral CAR
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Carsales (CAR)
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