Lending Association

CAR Group boosts interim dividend by 21%

CAR Group (ASX:CAR) has lifted its interim dividend by 21% to a 50% franked 34.5 cents a share after reporting a solid outcome of its expansion into the US and Brazil car sales markets. The company revealed in its interim report that it enjoyed double-digit revenue and earnings growth in all key markets.

CAR Group said, “The transformative acquisitions completed in FY23 in the US and Brazil, coupled with good performance in Australia and Korea, have helped to deliver outstanding financial results and strong returns for shareholders.”

“The result was delivered against a more complex macroeconomic environment, demonstrating the strength and resilience of the group’s diversified business model and the value it provides to its customers.”

“The result highlights the significant long-term growth opportunity in the group’s large and underpenetrated markets,” directors enthused.

On a proforma basis, revenue of $531 million was up 18% on the prior corresponding period; proforma EBITDA of $277 million, up 19% with a 52% margin at this level which was “marginally higher” than in the year-ago period. (Directors pointed out that the “proforma results are the best reflection of the underlying performance of the business as they normalize for recent acquisitions”)

On an adjusted basis (to reflect the impact of the acquisitions), revenue of $531 million was up 60% on the first half of 2022-23, while adjusted EBITDA of $277 million was up 56%, and adjusted NPAT of $163 million was up 34%.

Results reflect the consolidation of Trader Interactive and Webmotors in the December half, directors pointed out.

The company’s reported results showed EBITDA of $269 million, up 63% on the previous corresponding half, but reported NPAT of $117 million, which was down from $416 million in the first half of 2022-23 “which included recognition of a $333 million gain on the acquisition of Trader Interactive.”

In commentary, the company pointed to the performance of its core market in Australia in the half, which saw “double-digit growth across the Private, Dealer, and Media revenue segments in Australia.

“Carsales.com.au extended its market leadership position from an audience and inventory perspective, maintaining its focus on driving the adoption of higher-value products such as depth.”

“Revenue outcome was supported by a robust private seller market, increased depth penetration, demand for instant offer and the continued delivery and evolution of the media strategy.”

Looking to the full June financial year, directors were confident of more of the same.

“We expect to deliver good growth in Revenue and EBITDA in FY24” on a proforma basis while on an actual basis: We expect to deliver very strong growth in Revenue and Adjusted EBITDA and strong growth in Adjusted NPAT in FY24.

And directors said they expect the margin to grow on an EBITDA basis over the rest of the financial year (from the 52% in the first half).