Reporting Season

Elevated demand and price inflation lifts Carsales profit in first half

Mon 14 Feb 22, 10:24am (AEST)
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Key Points

  • Carsales earnings mostly in-line with broker expectations
  • Theme of elevated vehicle demand boosting sales and customer engagement
  • Carsales expects several business segments to have a stronger second-half

Carsales (ASX: CAR) has hitch-hiked elevated global demand and price inflation for vehicles, delivering an upbeat first-half FY22 performance.

The company's stock rallied 7% as the market opened.

Financials at a glance: 

  • Revenue of $242m, up 22% 

  • Reported net profit of $75m, up 22%

  • Adjusted net profit of $89m, up 20% 

  • Interim dividend of 25.5 cents per share, up 2% 

Carsales shares will go ex-dividend on Monday, 18 March. The interim dividend represents a yield of 1.1% based off today’s open price ($23.10). 

Bell Potter and Citi were expecting a net profit result of $83m.

Morgans had forecasted first-half revenues of $240m and an interim dividend of 26 cents per share.

“We have seen very strong consumer engagement across our global network of sites, with traffic up 12% versus pre-pandemic levels,” said Carsales CEO Cameron McIntyre. 

“Demand for cars globally has been strong due to lower public transport usage, the absence of international travel and the evolution of more flexible working arrangements. Demand for lifestyle assets has also strengthened, particularly caravans, motorbikes and boats as consumers seek socially distanced outdoor travel and leisure activities.”

FY22 outlook 

Carsales said it expects to deliver solid growth in Group adjusted revenue and net profit in FY22. No specific guidance was provided. 

The company’s commentary alludes to a stronger second-half, notably: 

  • Dealer segment performance to “improve considerably on the first half of FY22” 

  • Private segment anticipates “good revenue growth in H2”

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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