Zooming ahead: Carsales (ASX:CAR) reports strong results amid COVID-19 traffic growth

The Carsales.com Ltd (ASX: CAR) share price is edging higher on the back of the company’s financial results, released this morning.

The Carsales share price is currently trading at $21.71, a gain of 0.56%.

Let’s take a look at what the company reported today.

Car Sales share price up amid half-yearly results

Highlights of Carsales’ half-year (H1 FY22) results include:

• Look-through revenue soared 30% compared on previous corresponding half (PCP) to $282 million
• Look-through EBITDA climbed 15% on PCP to $149 million
• Adjusted net profit after tax (NPAT) of $89 million, up 20% on PCP
• Adjusted earnings per share (EPS) of 31.4 cents, a 6% gain on PCP
• A fully franked dividend of 25.5 cents per share.

What else happened in the half?

The company reported it had improved its competitive position in all major markets.

According to Carsales, consumer engagement is higher than prior to the COVID-19 pandemic.

The company was impressed with its international performance in South Korea, Brazil, and the United States. All of these businesses achieved double-digit revenue growth in the first half of the financial year.

During the half, Carsales also acquired a 49% stake in Trader Interactive.

Management comment

Commenting further on the results, group CEO Cameron McIntyre said demand for cars globally has been strong due to fewer people using public transport, less international travel, and flexible working arrangements:

We have seen very strong consumer engagement across our global network of sites, with traffic up 12% versus pre-pandemic levels.

Our International growth strategy continues to deliver. We have an enviable portfolio of International assets, which are key pillars of our long-term growth agenda.

Globally, we are investing in moving more of the buying and selling journey online, and this positions us well as we look to partner with our dealer customers to deliver an improved consumer experience and significant long term growth opportunities across all our businesses.

Since completing the acquisition of Trader Interactive in September, we continue to be very impressed with the Trader management team and the operations and fundamentals of the business.

What’s next?

Carsales Australia expects dealer performance in the second half of the financial year to get better due to more volumes, higher yield, and strong growth.

The company is expecting higher revenue and EBITDA from its investments in the second half due to more profit and volumes in its tyres business.

Looking at the company’s international business, Carsales is confident of revenue growth in Korea, Brazil, and the United States in 2022.

Car sales share price recap

The Carsales share price has gained 2% in the past year but is down more than 13% year to date.

In the past month, the company’s shares have slid 8%.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 6% over the past year.

Carsales has a market capitalisation of around $6.1 billion based on today’s share price.

The post Zooming ahead: Carsales (ASX:CAR) reports strong results amid COVID-19 traffic growth appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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