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CAR Group (ASX: CAR), owner of the carsales.com.au website, has topped $1 billion in revenue for the first time as its international operations began firing on all cylinders in FY24.
The online vehicle marketplace has delivered double-digit revenue and earnings growth in all of its key markets, led by recent acquisitions in the US and Brazil.
While CAR Group posted a 61 per cent slump in its bottom-line profit to $249.9 million for the year, the previous year was boosted by $487 million gain on acquisition of US-based RV and powersports marketplace platform Trader Interactive and Brazil’s Webmotors.
The adjusted net profit after tax of $344 million is up 24 per cent, which reflects a full-year consolidation of Trader Interactive and Webmotors.
The company, which posted a 41 per cent increase in total revenue to $1.098 billion, estimates its platforms globally achieved 18 billion page views from 1.3 billion sessions and sold 2.6 million vehicles online in FY24.
CAR Group’s CEO Cameron McIntyre describes FY24 as “another great year” for the company.
“We have achieved excellent financial results in FY24 with double-digit revenue and earnings growth in all of our key geographies,” he says.
“This is a great outcome and reflects the strength of the business model as well as its resilience given a more challenging operating environment in some of our markets.
“Our recent acquisitions in Brazil and the United States are performing very well, and we are confident these businesses will continue to drive significant long-term value for shareholders.”
McIntyre says CAR Group’s first year as majority owner of Webmotors in Brazil has been “outstanding”.
“Aside from delivering exceptional performance outcomes, our partnership with Santander is stronger than ever,” he says.
CAR Group lifted its stake in Webmotors to 70 per cent last year, leaving global consumer bank Santander with the remaining 30 per cent.
“In North America, we delivered excellent results by investing in growing our audience and improving our technology,” says McIntyre.
“Double-digit revenue and earnings growth in Australia was supported by a robust used car market and strong operational performance.
“Our South Korean business continues to grow its proportion of premium products and the volume of fully digital transactions.”
McIntyre says CAR Group has maintained its “significant market leadership” with its data and technology providing “real value for our customers”.
“As the vehicle transaction process becomes increasingly digital, we see great potential to deliver even better outcomes for our customers,” he says.
“In media, we are leveraging new technology and IP across the group, leading to improved advertising viewability, yield, and consumer experience. Our dynamic pricing engine has successfully increased private ad yields in both the US and Brazil following its implementation in those markets.”
CAR Group notes that its “strong balance sheet and conservative leverage” has positioned the company to invest further in technological innovation.
“Our momentum gives us confidence in our ability to continue to grow the business over the coming years,” says McIntyre.
Australia delivered revenue and adjusted earnings growth of 13 per cent each, driven by solid demand for used cars and more buyers looking for higher value products.
North America’s proforma revenue is up 16 per cent while proforma EBITDA has risen 18 per cent, or 13 per cent and 15 per cent respectively on a constant-currency basis.
Revenue and EBITDA growth in Asia was 17 per cent and 13 per cent respectively, or 15 and 11 per cent on a constant-currency basis.
Latin America’s proforma revenue powered ahead by 31 per cent, while proforma EBITDA surged 39 per cent (25 per cent and 34 per cent respectively in constant-currency comparisons).
CAR Group says its performance in Latin America has been steered by “strong execution of the Webmotors’ national expansion plan, increasing depth penetration, higher private ad yield from dynamic pricing and increased finance penetration”.
The company is expecting continued growth in FY25, with South America notably expecting “strong growth” in both revenue and EBITDA.
CAR Group is paying a final dividend of 38.5c per share.
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