Cazoo sales hit £250 million despite turbulence
Online used car retailer Cazoo has seen its quarterly revenues top £250 million for the first time as it faced off challenging market conditions and a decline in consumer spending.
The UK start-up, founded by serial entrepreneur Alex Chesterman, sold 19,700 cars in the first quarter of 2022, more than double what it did this time last year. Wholesale vehicle sales tripled to 6,460.
Despite the rise in sales, Cazoo’s profit per car sold shrank to £124 in the first quarter and its overall gross profit margin slid to 0.5%.
Chesterman said: “This strong acceleration in growth comes despite a rapidly changing macroeconomic backdrop in our markets.
“While we are very mindful of the wider macroeconomic uncertainties, we remain laser focused on the execution of our strategy.”
Used car sales have boomed in recent years after supply chain problems and a shortage of semiconducators led to a shortage of new vehicles.
The Cazoo marketplace allows customers to buy, sell or part-exchange a car, which the company delivers to a new owner in exchange for a fee.
It was founded in 2018 by Chesterman, who also set up online real estate business Zoopla.
The company listed in New York via a special purpose acquisition company or SPAC, in 2021 for $8 billion. Chesterman said the decision to snub the London listing market was because “US investors understand better businesses investing in the short term for future growth.”
Shares in the business have crashed over 80% since last summer and the stock was down another 6% in New York today. The slump values Cazoo at around $1.2 billion.
Analysts at Davy said Cazoo was maknig “progress” against “a tough backdrop”.
Cazoo plans to ramp up its car reconditioning capacity in a bid to further boost sales and is set to launch its online car marketplaces in Spain and Italy later this year.
Chesterman owns around 180 million shares in Cazoo worth £227 million, based on shareholdings disclosed in the company’s annual report.
