The Carsales.Com Ltd (ASX: CAR) share price went up around 6% after delivering its FY22 report.
Carsales is a business that owns Australia’s largest online automotive, motorcycle and marine website. It also owns stakes in other websites in other countries in Brazil, the US, South Korea, Mexico and Chile.
Carsales share price rises after FY22
The company reported a few different things to investors, here are some of the highlights:
- Revenue rose by 19% to $509 million
- EBITDA (EBITDA explained) rose 12% to $270 million
- Net profit after tax (NPAT) went up 23% to $161 million
- Earnings per share (EPS) rose 8% to 56.9 cents
- Final dividend up 9% to 24.5 cents per share
Carsales Australia achieved ‘adjusted’ revenue growth of 18% and adjusted EBITDA growth of 10%. Dealer adjusted revenue rose 6%, while private revenue increased 26% thanks to a strong increase in private advertisement volume.
Carsales International experienced double digit revenue and EBITDA growth in the US, South Korea and Brazil. Brazil saw revenue growth of 26% and EBITDA growth of 23%.
Growth continued after the FY22 first half result
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FY23 outlook
In FY23, Carsales said it expects to deliver “good” growth in adjusted revenue and adjusted EBITDA in FY23 on a ‘pro forma’ basis (that means calculated by the company to give a representation of what’s happening).
Using ‘actual’ numbers, Carsales is expecting “very strong” growth of adjusted revenue, EBITDA and net profit.
Carsales also said that it’s expecting to see an improvement in the company’s adjusted EBITDA margin.
In terms of its dealer segment, the underlying automotive market conditions are reportedly “buoyant”. It’s expecting solid growth in dealer revenue in FY23, driven by increased penetration of premium products.
The private segment is also expected to deliver “good” revenue growth”, supported by continue growth in private ad volumes, ad yield and ‘instant offer’.
Turning to the international segment, South Korea is expected to demonstrate strong revenue growth and good EBITDA growth in FY23.
It’s a similar story in Brazil, with strong growth expected in revenue and EBITDA.
In the US, good revenue growth is expected, as well as strong growth of adjusted EBITDA. It has seen continued positive momentum in inventory and customer volumes since the acquisition announcement in June.
My thoughts on the Carsales share price
Carsales is getting closer to the share price it was at when 2022 started. How long will these good conditions last for car buying? I’m not sure, but if demand is cyclical then this doesn’t strike me as the best time to be buying shares.
Instead, there could be other ASX growth shares to think about which are better value.
