“Alex Chesterman is "incredibly proud" of the team, despite losses skyrocketing 30% from 2021's £544m. But hey, at least they managed to increase their revenues by 91% to £1.25 billion .”

Introduction:

Hold onto your hats, folks, because am-online.com reports that Cazoo, the online used car retailer, has proudly announced a whopping £704 million loss for 2022. That's right, you heard right - founder Alex Chesterman is "incredibly proud" of the team, despite losses skyrocketing 30% from 2021's £544m. But hey, at least they managed to increase their revenues by 91% to £1.25 billion!

In a bold strategy of "we can't lose money if we don't have a business," Cazoo withdrew from Europe, slashed its UK car handover network, and reduced headcount. They also exited the car subscription market and sold their Cazana used car data business, aiming for £200m in annual savings.

Even with all these cuts, the company still managed to lose £254m in EBITDA (adjusted for those pesky exceptional and non-recurring items) compared to a £168m EBITDA loss in 2021. On the bright side, Cazoo did see an improvement in retail gross profit per unit to £596 in Q4 (up 156% YoY), forecasting even further Q1 2023 improvement to £950.

Despite the financial rollercoaster, Chesterman remains optimistic, asserting that there's "significant appetite" for buying and selling cars online. With Cazoo now targeting 50,000 to 60,000 used car sales in 2023, Chesterman remains laser-focused on improving unit economics, optimising the fixed cost base, and maximising the cash runway.

Can Cazoo can turn those losses into profitable growth in the future - or at least find more things to be "incredibly proud" of.

You can read the full article here.