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Carsales.com Releases Half Yearly Earnings

Carsales.com Releases Half Yearly Earnings
Feb 10, 2016 By Ben Khouri Tags: CAR

Carsales.com Ltd (ASX:CAR) have released their half-yearly results for the period ending 31st December 2015. The vehicle classifieds site lifted revenues by 11% showing improvements in domestic operations. 

Half-Yearly Results

Revenue for the half year ending 31st of December 2015 was $A167.3 million. This was an 11% improvement to the PCP. With the vast majority of revenue coming from within Australia, the 11% (H1FY16: $A165.6 million) surge in domestic revenue was a major contributor to their growth.

Internationally, most of their investments have been making moderate returns. Carsales share of earnings from South-Korean Based SKENCarsales, along with the Latin American WebMotors garnered 22% and 14% local currency revenue growth respectively. However, the Asian based iCarAsia (Carsales have a 20.2% interest) made a loss for the period. 

Overall, EBITDA, along with NPAT grew 12% and 10%, to A$81.5 and $51.3 million respectively. 

CEO and Managing Director Greg Roebuck commented on the results: “To once again deliver record half year results to our shareholders, whilst growing our market leading position through expansion of the breadth and depth of Carsales services to all our customers, is testament to the strength of the domestic business and the growth potential of our international strategy.”

Half-Yearly Activities

As briefly mentioned before, Carsales has grown their investment portfolio internationally. The most recent acquisition being the 65% stake in Mexican based auto classifieds site SoloAutos, for US$9 million (Approximately A$12 million).

Capital Structure

As at the 31st December 2015, Carsales reported Net Debt was A$200 million. This was a 12% increase to the 30th June 2015, due in part to their investments.

Furthermore, for the half year ending 31st December 2015, there was a reduction in their reported Leverage Ratio (Net Debt/Annualised EBITDA) to 1.26, from 1.36 in HY15.

Dividend

Carsales board of directors have declared a fully franked interim dividend of 17.8cents per share. (Interim H1FY15: 16.2cents per share). The record and payment dates are on the 24th March and 15th April 2016 respectively.

Outlook

Domestically, Carsales has stated that January has once again been an attractive month for car buyers, within their domestic business. For the year ahead, the company anticipates to achieve strong EBITDA growth with a moderate rise in NPAT.  Internationally, Carsales expects to see moderate local currency earnings growth for each of their interests in Korea and Brazil.

Share Performance

Despite the rather positive announcement, CAR eased slightly upon open. CAR last traded at $10.68 as at 10:48 AM (AEDT), and has lifted around 3% in the past month.

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Ben Khouri Author: Ben Khouri Feb 10, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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