Carsales.com Ltd (ASX: CAR) is an online advertisement and data research company that currently operates Australia’s leading online automotive sales site as well as a range of other durable goods advertisement sites including Boatsales, Red book and Bikesales. The Company also has an expanding international business portfolio, with investments in the Asian and Latina American automotive advertisement sectors.
What are the FY19 results for CAR?
This morning (21st August 2019) Carsales.com Limited reported its FY 2019 results, the key aspects are identified below:
- Revenue Growth up 11% to FY19 total $418m.
- Adjusted EBITDA up 7% to $210m.
- Reported Net Profit After Tax (NPAT) down 27% to $133m.
- Adjusted NPAT up 3% to $131m.
- Final FY19 dividends 25 cents per share up 5%.
What are the drivers behind the result?
The reported 27% fall in NPAT for FY19 is largely a result in a write-down of Carsales 50.1% ownership of Stratton Finance, a vehicle finance broking business that Carsales has been looking to divest from in order to purse its changing strategic objectives.
The continued revenue growth in Carsales has been able to report is a product of its diverse product range that services a wide range of markets and makes the Company less susceptible to down turns in any specific sector. This has been particularly relevant as tighter lending restrictions have reduced consumer spending on new cars, additionally as economic conditions domestically slowed during FY19 consumers sought better deals through used car purchases increasing sale volumes.
What is the future outlook for CAR?
The Company is expecting a recovery in the Australian automotive sales industry as interest rates remain low and the lending environment begins to improve. CAR is also expecting to increase its data revenue streams across all sectors, whilst international ventures are predicted to continue to return revenue growth.
How has the market reacted?
The share price of CAR has jumped 12.25% to a price of $15.760 as investors had already taken the Company’s divestment from Stratton finance into account accordingly strong revenue growth has investors attention for the future.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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