The CAR Group Ltd (ASX: CAR) share price fell 6.5% after reporting its HY25 result.
CAR Group operates various car online marketplaces including Carsales (Australia), Encar (South Korea), Trader Interactive (the US) and Chileautos (Chile). It’s also a majority shareholder of Webmotors. It recently exited its tyre business.
HY25 result
Here are some of the highlights for the six months to 31 December 2024:
- Revenue rose by 9% to $579 million
- EBITDA increased by 9% to $292 million
- Adjusted net profit after tax (NPAT) went up 9% to $177 million
- NPAT grew 5% to $123 million
- Interim dividend increased 12% to $0.385 per share
The car marketplace business reported that Carsales consolidated its market leadership in the first half of FY25, helping both revenue and adjusted EBITDA rise 9%. Dealer revenue rose 10%, private revenue rose 6% and media revenue rose 10%.
In North America, there were challenging market conditions, both revenue and adjusted EBITDA rose 9%.
In Asia it achieved revenue growth of 15% and adjusted EBITDA growth of 12%.
Turning to Latin America, the company saw revenue soar 30% and adjusted EBITDA increased 34%. The company said the Webmotors business progress was achieved through extension of market leadership, the introduction of new products, regional expansion and growth in finance revenue.
This result showed some progress, but not enough for the CAR Group share price.
Management comments
The CAR Group CEO Cameron McIntyre said:
The Australian automotive market has continued to be resilient over the over the past 6 months despite ongoing cost of living and interest rate pressures on consumers. Consumer purchasing intent favours used over new car purchases and vehicle prices have edged lower from post pandemic highs.
In Brazil, webmotors has had another outstanding six months, significantly extending its audience leadership which supported strong financial outcomes. The increasing product penetration of our flagship premium products in the US and Korea were also highlights of the last six months. I am extremely proud of the team’s accomplishments and the outstanding results we continue to deliver for our customers and shareholders.
The opportunity ahead of us is significant. We operate in diverse geographies with large, underpenetrated addressable markets. We have multiple levers to deliver future growth, and we are accelerating the exchange of knowledge and ideas between each of our global businesses. With a robust balance sheet and prudent leverage, we are strategically positioned to invest in further innovation and continue to deliver excellent results for our customers.
Outlook for the CAR Group share price
The business expects good growth in revenue, EBITDA and net profit over the rest of FY25. It’s expecting to achieve good growth in Australia, solid growth in North America (with a slight delay to a price rise), strong growth in Latin America and good growth in Asia.
However, the market was seemingly expecting more from the ASX tech share. But, it’s important to remember that the CAR Group share price has risen by more than 80% since the start of 2023, so today’s decline was only a mild setback.
This was a solid result, but not exactly exciting growth numbers for the valuation it trades at. There are other ASX growth shares I’d rather buy right now.
