Used car marketplace Cazoo says it expects more costs related to last month’s major restructuring that drastically watered down shareholders’ stakes, as it revealed sales fell by 49% in the third quarter.
The struggling firm revealed a plan last month to give its creditors equity in the business, as it seeks to boost its share price and market cap in order to remain listed on the New York Stock Exchange.
Shares have plummeted since Cazoo’s 2021 IPO. Having initially gone public at a valuation of $8 billion, its current share price of just $0.45 suggests a valuation of only $17 million. That’s a decline of 99.8%.
Today, CEO Paul Whitehead said the firm expects “further one-off costs” related to this deal as Cazoo announced its third-quarter results.
The number of vehicles sold fell by 49%, though profit per car sold tripled. Cazoo has moved towards a lower-volume, higher-margin strategy as it aims to cut its losses. The firm also warned that “demand for used cars remains volatile”.
Whitehead said: “I am very pleased with our results in the third quarter of 2023 where we continued to build on our track record of delivering on our targets.
“Despite the challenging economic environment with increased interest rates and higher costs of living, our online value proposition continues to appeal to consumers as we sold 9,525 retail vehicles.”
Cazoo expects to finish the year with between £100 million and £115 million in cash, and it expects a loss of similar scale for the year.
