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, announces its financial results for the three and six months ended June 30, 2023.
Cazoo believe we have made meaningful progress in H1 2023. Since Q2 2022 we have maintained strong momentum in improving Retail GPU, while executing at pace the strategic changes at the Company.
Over the last 12 months we implemented restructuring changes, rightsized our operational footprint and headcount, exited the EU businesses and consolidated our resources in the UK market. We delivered steady progression in our Retail GPU up to £1,290 by Q2 2023 from £309 in Q2 2022.
For the balance of 2023, our focus remains fully on improving unit economics, optimizing our fixed cost base and maximizing our cash runway. We reiterate our plan to sell 40,000-50,000 UK retail units (total units of 50,000-60,000, the balance being made up by wholesale units).
With the sequential improvement in Retail GPU delivered so far, we reiterate our expectations for the full-year Retail GPU to be around £1,200 and to approach £1,500 by the end of 2023. We are maintaining our adjusted EBITDA guidance for the year in the range of £(100) million to £(120) million.
Cash and cash equivalents at the end of 2023 are expected to be in the range of £110 million to £130 million in addition to c.£15-25 million of self-funded retail inventory. We have also identified a further ~£20 million of annualized cash savings expected to be delivered in H2 2023 that will benefit our performance in 2024.
Paul Whitehead, Chief Executive Officer of Cazoo said, “I am pleased with the decisive and meaningful progress we have made to improve unit economics, optimize our fixed cost base and maximize our cash runway in the first six months of 2023. The results show tangible progress across all areas of the business.
“Our Q2 and H1 2023 results are in line with our expectations and our cash position remains strong, as we continue to reduce costs and target every area of our business for greater operating efficiencies.
“Through the recent UK restructuring and the wind-down of our EU business, we have rightsized the operational footprint and headcount, optimizing the business for today, with a view to future growth.”
Paul Woolf, Chief Financial Officer of Cazoo, added, “The results reported today demonstrate sustained improvement in Retail GPU, fixed and variable cost reduction in line with our plans, and better adjusted EBITDA.
“In Q2 2023, we delivered further sequential uplift to Retail GPU to £1,290, up 32% from £980 in Q1 2023 and 317% year-on-year from £309 in Q2 2022. For H1 2023, Retail GPU averaged £1,106 (up 389% from £226 in H1 2022) and gross profit grew to £23 million from £6 million a year ago with gross margin improving from 1.0% to 5.4%.
“Ancillary revenue continues to grow – notwithstanding the challenging economic environment – with over 53% of buyers attracted by our proposition to finance their purchase directly through our platform entirely online.
“Encouraging progress on reducing fixed and variable costs post the restructuring changes executed earlier in the year supports our adjusted EBITDA guidance for the year in the range of £(100) million to £(120) million.
“We have identified a further £20+ million of annualized cash savings expected to be delivered in H2 2023 that will benefit our performance in 2024. Lower restructuring charges and lower EU exit costs helped us to preserve cash in the first half of the year and allow us to reiterate our expectations for the year-end cash of £110 million to £130 million.”