CARSALES BOOSTS PROFIT AND CONTINUES GLOBAL EXPANSION
9 August 2016, Written by James Perkins
A THRIVING finance division has helped boost Carsales.com (ASX:CAR) net profit after tax by 6 per cent to $109.3 million in FY16 as the business continued its global expansion.
Each of the Carsales.com divisions reported growth in revenue, but it is the 29 per cent year on year profit growth in finance and related services that stands out.
The business overall reported operating revenue of $344 million (up 10 per cent) and EBITDA of $170.3 million (up 10 per cent).
Carsales.com CEO and Managing Director, Greg Roebuck, says the growth in revenue and EBITDA reflects a focus on growing its global portfolio of classified advertising and complementary market businesses.
Dealer revenue is up 10 per cent year on year, while private seller revenue performance is up 19 per cent yoy and display revenue is up 9 per cent.
"We are building a dynamic global business; the economies of scale that come with this, along with our world leading technology, are helping us evolve our business. Dealers and consumers have the same high expectations in all of our markets. As we continue to transfer our world class technology and know-how into these markets, we see improved performance."
The company has made investments in South Korea and Brazil and both are delivering strong growth.
SK Enkar is South Korea's leading used car and spare parts company and delivered 21 per cent revenue growth, while the EBITDA margin was strong at 51 per cent. "We remain excited about the opportunity for further business expansion in the coming year," says Roebuck.
In Brazil, Webmotors reported underlying revenue growth of 13 per cent year on year. Operational improvements delivered 70 per cent growth in lead volumes and further business model improvements are planned.
The company will deliver a fully franked dividend of 19.5 cents per share, up 10 per cent on the prior corresponding period.
CAR is trading steady at $12.37 per share this morning.