Cazoo Group who are the UK’s leading independent online car retailer, which makes buying and selling a car as simple as ordering any other product online, today provides an update on its business performance in April 2023 and reports that it is in discussions with a group of holders (“Noteholders”) of its $630 million 2.00% Convertible Senior Notes due 2027 (the “Convertible Notes”) on a potential debt restructuring.
Paul Whitehead, Chief Executive Officer of Cazoo said, “I am very pleased with our performance so far in the second quarter 2023. In April, we achieved our highest ever level of Retail GPU, ahead of the record result delivered in March, giving us confidence in our ability to maintain sustainable Retail GPU improvement through the remainder of the year and beyond.
“In Q2 2023, we expect Retail GPU to exceed £1,200, a significant further increase on the record level of £980 achieved in Q1 2023 (up 20+% QoQ) and up from £309 in Q2 2022 (up 280+% YoY).
“It is encouraging to see that the action points of our plan to improve unit economics and reduce costs are coming together, resulting in tangible progress every month.
“Variable and fixed costs are reducing in line with expectations; the cash position remains strong and our delivery of targets for the year is on track. The cash position at the end of April was £215 million1 of cash and cash equivalents (March 31, 2023: £215 million1) and approximately £50 million of self-financed inventory (March 31, 2023: ~£60 million).
“We have now completed our exit from the EU, allowing us to focus our efforts fully on the UK market, the largest in Europe. We reiterate our guidance for 2023 and remain fully focused on improving our unit economics, optimizing our fixed cost base and maximizing our cash runway.”
The Company continues to explore possible strategic transactions to drive scale and accelerate its path to profitability and is in discussions with a majority of the holders of its Convertible Notes on a potential debt restructuring with a view to ensuring a more robust capital structure going forward, including a reduction in debt, the issuance of additional equity and a lower aggregate interest cost per annum.
Unless the Company and noteholders reach an agreement in principle or as otherwise required by law, the Company does not intend to provide any updates on these discussions. Given the early stage of this engagement, there is no assurance that any such discussions will progress or result in any of the foregoing and, if so, the terms of any agreement.