2 Cheap Cars Group (2CC) H2 2025 earnings summary

Executive summary

• Reported net profit after tax (NPAT) of $3.3 million for FY25, a decrease of $2.9 million compared to FY24, but in line with guidance to exceed NZ$3m.

• Revenue and income declined 6% year-over-year to $82.0 million, reflecting subdued market demand and lower immigration.

• Underlying EBITDA including finance income fell 32% to $8.0 million; underlying NPAT dropped 47% to $3.3 million.

• Vehicle sales decreased 6% to 7,675 units, with gross margin down 14% to $17.8 million.

Financial highlights

• Gross margin represented a 21.7% contribution margin despite aggressive sector discounting.

• Operating expenses rose 10% year-over-year, mainly due to higher listing fees and inflationary pressures.

• Net operating cash inflow was $6.7 million, down $0.2 million from FY24.

• Inventory increased to $14.9 million, up $1.1 million, supported by direct purchasing through the Japanese subsidiary.

• Interest costs (excluding leases) fell 44% year-over-year due to changes in finance facilities.

Outlook and guidance

• Trading conditions remain challenging in early FY26, but improvement is expected as interest rates decline and consumer credit access improves.

• Strategic focus on margin optimisation, increased sales volume, and digital/operational enhancements.

• New flagship site at Clemow Road, Sylvia Park, opening August 2025, will expand retail capacity and brand visibility.

• Management and board are reassessing strategy to ensure continued shareholder value.