Cazoo reported third quarter gross profit of £ 11.8million year over year as margins and sales increased due to the growing scale of the business.
The quarterly update follows the company’s financial results for the first half of 2021, which revealed that it recorded an adjusted EBITDA loss of £ 69million during the period.
The used-car e-commerce company sold 13,074 used cars in the third quarter, an increase of 209% year-over-year.
Revenue increased 267% year-on-year to £ 174.4million in the third quarter.
Retail gross margin per unit (GPU) rose to £ 801 for the quarter as the business “continued to deliver operational efficiencies”. The GPU was also improved by Cazoo who changed their stock acquisition mix to buy more vehicles from their customers after launching their own direct channel in July.
Cazoo purchased 6,761 vehicles directly from consumers in the third quarter.
Alex Chesterman OBE, Founder and CEO of Cazoo, said: “It is very clear that our proposition is resonating strongly with consumers and that the shift to online car buying is accelerating.
“The biggest constraint to growth remains our ability to recondition cars quickly enough to meet demand.
“Introducing this process in-house resulted in a recent drop in the number of vehicles available for sale during the transition and we strongly believe that higher stock levels would have resulted in even higher retail sales in the third. trimester. “
Chesterman said the company continues to ramp up remanufacturing production as a key priority and expects to make further progress in increasing inventory in the fourth quarter.
The third quarter results follow the acquisition by Cazoo of SMH Fleet Solutions for £ 70 million and then of Cazana for £ 25 million.
Chesterman said the acquisition of SMH provided “significant additional renovation capacity to support future growth.”
He said, “While the industry as a whole is experiencing supply constraints, we have seen limited issues in this area to date and have become less reliant on external sources of supply after launching our channel. direct purchase of cars, which is expected to supply a large volume of vehicles.
“Looking forward to the rest of the year, we continue to see very strong consumer demand in our car buying and selling channels.
“We currently have lower levels of available-for-sale vehicles than we consider optimal and we continue to make solid progress in increasing our reconditioning production following our acquisition of SMH. “
Cazoo forecasts a turnover of over £ 650million for 2021 (which excludes £ 15-20million in sales where Cazoo has sold vehicles as an agent for third parties), implying a fourth quarter growth of more than 25% quarter on quarter and more than 200% year on year.