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CAR

Carsales.com Limited - FY 2019 Results

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

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.

carsales.com-FY19-Results-300x120

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.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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