Car Dealer News: Cazoo, the troubled used car retailer, is finally seeing the benefits of its extensive restructuring efforts as it successfully slashes its losses in the first half of this year. The company's financial results for the six months ending June show a significant improvement, hinting at a potential turnaround for the company.

Despite selling fewer cars, Cazoo's losses reduced by a substantial 37% year on year, falling from £241 million to £151 million after making tough decisions such as withdrawing completely from the continental European market and ending costly sports sponsorship deals.

Gross profit and gross margin also demonstrated positive growth in the first half of 2023. Gross profit soared by a remarkable 283%, rising from £6 million to £23 million. The gross margin increased by 4.4 percentage points, now standing at 5.4%.

Cazoo's strong performance in Q2 contributed to the positive results, with a gross profit of £8 million and a gross margin of 4.7%, showing a remarkable 167% increase compared to the previous year. Additionally, the company's cash reserve stands at an impressive £195 million.

The adjusted EBITDA loss for the first six months improved by 51%, decreasing from -£142 million to -£70 million. The adjusted negative EBITDA margin also improved by 7.7 percentage points, now at -16.7% compared to the previous -24.4%.

Cazoo's CEO, Paul Whitehead, expressed his satisfaction with the significant progress made to improve the company's unit economics, fixed-cost base, and cash runway during the first half of 2023. He emphasised the tangible progress made across all areas of the business, and despite the challenges faced, the company's cash position remains strong.

Despite the encouraging improvements, there are still some concerns within the company's accounts. Cazoo sold 29% fewer vehicles than the previous year's first half, amounting to only 28,985 units compared to 40,570. Retail and wholesale transactions experienced significant declines as well.

Acknowledging the challenges, Cazoo is determined to continue its cost-cutting measures. The company has already identified £20 million in cash savings for the second half of the year, with the board adjusting its EBITDA guidance and expecting a loss between £100 million and £120 million for the entire year.

The past year has been a tumultuous period for Cazoo, grappling with mounting losses and the decision to withdraw from mainland Europe. However, the company is optimistic about its future and aims to recover its financial standing.

Attribution: Original article by Jack Williams was published on August 1, 2023, on cardealermagazine.co.uk.