Carsales.com’s (CAR) interim net profit for the December six months was hit by a sharp fall in revenue from vehicle financing. The online vehicle car classifieds company on Wednesday reported an 8% fall in net profit of $47.2 million for the six months to December 31, with its finance and related services unit posting a 22% revenue.
Carsales.com said the performance of its finance and related services business was impacted by "significant" volume reductions at lender BMW Finance, with volume bonus incentives hurt.
The company’s three other divisions – online advertising, data, research and services, and international – all grew revenue in the first half of 2016/17.
Excluding the finance and related services unit, Carsales.com’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9% to $78.7 million.
And that helped the board boost interim dividend by 5% to 18.7 cents a share for the final report by longtime CEO, Greg Roebuck who is about to step down.
He said in yesterday’s statement that the group’s core operations performance was “robust” in the first half.
"The carsales business has again delivered a strong performance driven by solid domestic and promising international growth," he said in a statement.
Revenue rose 7% to $178.6 million. And Mr Roebuck says the company is looking for a “solid uplift” in its Latin American businesses in the second half. But he warned that the Brazilian business remains a challenge were the economy is still deeply recessed.
Mr Roebuck said the June half year in Australia had started well, with January “again proving to be an attractive month for car buyers in the domestic business”.
Carsales declined to provide specific guidance, and said that it expects revenue and profit growth "will remain solid in the domestic core business".
Mr Roebuck said: "To once again deliver record revenue and EBITDA performance whilst consolidating our domestic market leading position, growing our international presence and responding to short term challenges in our finance business is very pleasing and is a testament to the strength of our strategy and the quality of the Carsales team."
Investors took a shine to the result and sent the share up more than 7.7% to $10.83.
