carsales shares added almost 4% on Monday after the company delivered excellent earnings growth in FY21 results due to continuing momentum in both Domestic and International markets.
Carsales reported that its three key marketplace businesses in Australia, South Korea and Brazil all strengthened their market leadership positions, with car buyers and sellers using their sites at record levels. This was reflected in carsales achieving double-digit earnings growth and delivering the highest annual net profit growth in 7 years. Adjusted EBITDA and Adjusted NPAT were up 10% and 11% respectively, while Adjusted NPAT saw its highest growth since 2014 with earnings growth across all segments. Reported Revenue was up 8% to $427m, while Reported EBITDA was up 20% to $241m and Reported NPAT was up 9% to $131m.
The company also recently announced the minority acquisition of Trader Interactive, a marketplace business in the United States that has leading positions in the recreational vehicle, powersports, truck and equipment markets. It is expected to be a transformational acquisition for the company, providing carsales with exposure to large and attractive addressable markets in the United States.
While current lockdowns and retail closures are having an impact on leads and private ad volumes, carsales says the business is well placed to recover all or most of the declines once retail re-opens. On this basis they expect to deliver solid growth in Group Adjusted revenue, Adjusted EBITDA and Adjusted NPAT in FY22. Depending on the duration and frequency of lock-downs in the first half, financial performance is likely to be more heavily weighted to the second half than usual.
Group CEO of carsales, Cameron McIntyre, commented: “While the COVID-19 environment has been very challenging for carsales, we are proud of the way we have navigated the challenge. We acted decisively to protect our customers and employees which has left our business in a strong position. We delivered the highest net profit growth this financial year since 2014, which is testament to the strength of our business model.”