Cazoo(US:CZOO)2022-08-02 17:09Financial Data and Key Metrics Changes - In Q2 2022, the company achieved record revenues of £333 million, up 145% year-on-year, driven primarily by UK retail revenues which increased over 140% year-on-year [12][22] - The company sold 23,955 cars in Q2, representing a 124% year-on-year growth, including 17,033 retail units, which grew by 94% year-on-year [23] - The UK retail gross profit per unit (GPU) increased by 150% from £124 in Q1 to £309 in Q2 [24] Business Line Data and Key Metrics Changes - The company has sold over 80,000 cars since its launch, with over 30,000 sold in the first half of 2022, making it one of the largest used car retailers in the UK [10] - Retail unit sales in Q2 were over 17,000, contributing to significant market share growth despite a challenging macroeconomic environment [12][23] - The company has increased its UK website inventory to over 7,500 cars, reflecting improvements in reconditioning capabilities [13] Market Data and Key Metrics Changes - The UK used car market consists of around eight million transactions annually, valued at over £100 billion, with digital penetration remaining low [19] - The company aims to capture a market share of 5% or greater, which could generate gross profit of close to £0.5 billion annually at a medium-term GPU target of £2,000 [20] Company Strategy and Development Direction - The company is focused on cash preservation and reducing the need for external funding while driving towards profitability [7][31] - A full strategic review of the business in Mainland Europe is underway to further reduce cash burn and ensure a path to cash flow breakeven without additional capital [8][28] - The company has implemented a business realignment plan aimed at sustainable gross margins and reduced SG&A costs while still expecting over 100% year-on-year growth in 2022 [16] Management Comments on Operating Environment and Future Outlook - Management acknowledges the deteriorating consumer confidence and potential recession but remains optimistic about maintaining strong momentum into Q3 [15][31] - The company is confident in its ability to capture significant market opportunities and has laid the groundwork for continued growth [32] - Management emphasizes the importance of reaching cash flow breakeven and reducing reliance on external funding [17][31] Other Important Information - The company has cash reserves of over £400 million and self-financed inventory of over £175 million as of the end of June [29] - A new Chief Financial Officer, Paul Woolf, has been appointed to succeed Stephen Morana later this year [30] Q&A Session Summary Question: What prompted the strategic review options for Europe? - Management indicated that the review aims to ensure a plan that does not involve further capital raising, with options ranging from business as usual to potential withdrawal from some markets [35][37] Question: How do you see the competitive backdrop in the UK? - The competitive landscape remains stable, with the company confident in its ability to grow market share as digital services become more prevalent [48][50] Question: What are the main areas of cost inflation in 1H? - Cost inflation has been observed across labor and materials, impacting GPU growth, but management expects to manage these costs effectively moving forward [61] Question: Can you provide UK retail GPU for July? - Management refrained from sharing specific figures for July but reaffirmed guidance of £500 to £600 for the year, expecting continued positive GPU trajectory [63]