Today iCar Asia Ltd (ASX: ICQ) released its full-year results for the period ending 31 December 2018 posting a net loss after tax of $13.6 million. Is it the next Carsales.Com Ltd (ASX: CAR)?
iCar Asia owns a portfolio of automotive websites that connect buyers and sellers in Malaysia, Indonesia and Thailand.
Key Results
iCar Asia reported:
- Revenue up 27% to $11.56 million
- Net loss after tax down 2% to $13.6 million
- Net cash used in operating activities was an outflow of $11.47 million.
Operational Results
iCar Asia reported that Malaysia has been profitable since September 2018, surpassing a major milestone with its first full quarter of positive cash flow in the fourth quarter. Supporting the positive cash flow were its leads up 41% from the previous year.
It also reported its Thailand operations became cash flow positive just before the year-end in December. However, its leads were down 13% from the previous year which may be a concern, with the company saying the, “Thailand marketplace business began optimising towards quality of leads over quantity of leads”.
It is only its Indonesian operations which are currently cash flow negative and the company introduced listing fee services in September 2018. Indonesia leads were up 16% from the previous year.
A Capital Raising?
iCar Asia reported they had $9.5 million in cash at year-end. They also reported they had access to $16.5 million of funds, comprised of a $5 million debt facility and $11.5 million from share options contingent on the prevailing share price being above the exercise price of $0.20. At the time of writing, the shares were $0.115.
Given they consumed over $11 million of cash in their operations, it would be unlikely for the share price to rise above the exercise price of $0.20 in the next year. It also seems likely a capital raising will be on the cards, which the company even hinted at saying, “the company is not factoring these additional funds [debt facility and share options] into its current capital plans”.
Rask Perspective
There has always been a lot of hype around iCar Asia and the possibility of it being the next Carsales.com. However, I believe the South East Asia market is different to Australia, with people preferring to buy brand new cars from reputable dealers out of fear of being sold a lemon or a stolen car in the second-hand market.
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