Cazoo Group turned a £700,000 loss to a record £11.8m profit during this year’s third quarter.
Its results for the three months to September 30, 2021 versus the same period in 2020 show the huge reversal of fortune, contrasting sharply with the £102m loss recorded for the first half of 2021.
The online used car retailer, which floated on the New York Stock Exchange and bought Cazana as well as SMH Fleet Solutions’ vehicle preparation centres during the quarter, saw revenue increase by 267 per cent from £47.5m to £174.4m, as the number of vehicles sold rocketed by 209 per cent from 4,232 to 13,074.
The latest sales figure comprised 9,460 retail and 3,614 wholesale units, the latter of which Cazoo said had ‘materially increased’ – up by 365 per cent from 777 – because of more cars being sourced straight from consumers, which it said meant it had only seen limited supply constraints.
Meanwhile, the retail gross loss of £202 it was making on every vehicle sold in 2020’s third quarter became a profit of £801, while the gross margin went up by 8.3 percentage points from -1.5 per cent to 6.8 per cent, which it said was because of increased scale efficiencies.
Founder and CEO Alex Chesterman said: ‘We are very encouraged by our record Q3 results.
‘It is very clear that our proposition is resonating strongly with consumers and that the shift to online car buying is accelerating.’
He admitted however that Cazoo currently had fewer vehicles for sale than it would like.
‘The biggest constraint to growth remains our ability to recondition cars fast enough to meet demand.
‘Bringing that process in-house has led to a recent dip in vehicles available for sale during the transition and we firmly believe that greater stock levels would have resulted in even higher retail sales over Q3,’ he said.
‘Continuing to scale our reconditioning output remains a key priority and we expect to make further progress in growing our inventory levels through the remainder of the year.
‘The acquisition of SMH this quarter has provided us with significant additional refurbishment capability to support our future growth.’
He added: ‘During the period, we also acquired Cazana, enhancing our data team and capabilities and enabling us to further optimise our vehicle purchasing and pricing across the UK and Europe.
‘We are very excited about our upcoming launch into mainland Europe as we continue to develop our team and infrastructure in both France and Germany, and we remain on track to launch in both markets later this quarter.
‘We will continue to accelerate our investment and rollout plans where we believe it is right to do so.’
Chesterman said: ‘Looking forward to the remainder of the year, we continue to see very strong consumer demand in both our car buying and selling channels.
‘We currently have lower levels of vehicles available for sale than we consider optimal and we continue to make solid progress on ramping up our reconditioning output following our acquisition of SMH.’
Cazoo forecasts a full-year revenue of more than £650m, not counting £15m to £20m of sales as an agent for third parties.
This, said Chesterman, implied final-quarter growth of more than 25 per cent versus the third quarter and over 200 per cent against 2020.