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Cazoo boosts gross profits and sales in Q3

Cazoo founder Alex Chesterman OBE

Cazoo has posted a gross profit of £11.8 million in Q3 year-on-year as margins and sales increased due to the company’s growing scale.

The quarterly update follows on from the company's financial results for the first half of 2021, which revealed it delivered a £69m adjusted EBITDA loss in the period.

The used car e-commerce company sold 13,074 used cars in Q3, an increase of 209% YoY.

Revenues increased by 267% YoY to £174.4m in Q3.

Retail gross profit per unit (GPU) increased to £801 for the quarter, as the business “continued to drive operational efficiencies”. GPU was also improved by Cazoo switching its stock acquisition mix to buy more vehicles from customers after launching its own direct channel in July.

Cazoo purchased 6,761 vehicles directly from consumers in Q3. 

Alex Chesterman OBE, founder and chief executive 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 fast enough to meet demand. 

“Bringing that process in-house has led to a recent dip in vehicles available for sale during the transition and we firmly believe that greater stock levels would have resulted in even higher retail sales over Q3.”

Chesterman said the company is continuing to scale its reconditioning output as a key priority and expects to make further progress in growing inventory in Q4.

The Q3 results follow on from Cazoo’s acquisition of SMH Fleet Solutions for £70m and then Cazana for £25m.

Chesterman said the SMH acquisition has provided “significant additional refurbishment capability to support future growth”.

He said: “While the wider industry is experiencing supply constraints, we have seen limited issues in this area to date and have become less reliant on external sources of supply following the launch of our direct car buying channel, which we expect to provide a significant volume of vehicles.

“Looking forward to the remainder of the year, we continue to see very strong consumer demand in both our car buying and selling channels.

“We currently have lower levels of vehicles available for sale than we consider optimal and we continue to make solid progress on ramping up our reconditioning output following our acquisition of SMH.”

Cazoo is forecasting 2021 revenues of over £650m (which excludes £15-20m of sales where Cazoo sold vehicles as an agent for third parties), implying Q4 growth of over 25% quarter on quarter and over 200% Y-o-Y.

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