Carly moved to buying its own vehicles to put out to its subscribers as the company struggled to source enough units from dealers and others in the face of stock shortages. 

It said that during the 12-months, its subscription revenue jumped by 84 per cent and that subscription revenue from its owned and leased vehicles reached 31 per cent of total revenue compared to zero in FY21.

In its financial statement to the Australian Securities Exchange (ASX), the publicly-listed company announced that the past financial year was challenging but would provide a strong springboard into FY23 with its focus on revenue opportunities in the car subscription market.

The past year Carly has also succeeded in securing finance facilities from top-tier financiers to support its growth in fleet size and the implementation of a hybrid vehicle supply strategy.

Chris Noone

It said that this hybrid strategy allowed the company to add vehicles to the fleet at a faster rate and a more positive impact on revenue and gross profit.

Carly CEO Chris Noone told GoAutoNews Premium that the second half of the FY22 year saw substantial gains in business activity.

“The fact that business accelerated in the second half really showed that despite some COVID-related headwinds, we had much better growth and that this continues into this financial year,” he said.

“We have also been able to secure more asset finance facilities. So we’re growing the fleet of vehicles that we finance and that we now own.

“This is also leading to greater profitability at the gross margin level.”

Mr Noone said that Carly has traditionally operated an exclusively asset-light vehicle fleet, where third-party owners provide vehicles in return for owner fees.

But that changed since COVID-19 caused global disruptions to vehicle supply. It now buys and leases vehicles which allows it to access more vehicle supply channels to meet the increasing demand for car subscription services.

“This strategy has been very successful to date, with owned and leased vehicles generating substantially more revenue and gross profit per vehicle compared to vehicles in the asset-light fleet,” he said.

Mr Noone said net profit for the past financial year was down 24 per cent to a loss of $3 million.

He said getting cars was a major issue in the 2022 financial year but that he expects the situation to change this year after the company identified ways to secure cars more rapidly.

“We know now that we have the model right. We are using asset finance to secure cars and we have been successful in locating and buying those cars,” he said.

“A lot of people say there are no new cars around but we are managing to find them and we are happy with the fleet that we’re building.

“We have also been able to maintain the utilisation of that fleet. Our utilisation rate is above 87 per cent at the moment.”

Mr Noone said the company has the opportunity to expand into different areas.

“We’re predominantly on the eastern seaboard at the moment; so we can expand on that,” he said.

“The other big opportunity we see is in the corporate space, which is the reason that SG Fleet invested in us a couple of years ago and joined the board.

“SG Fleet sees a very big opportunity with its corporate, government and not-for-profit customers. 

“We are doing very good business with referrals from SG Fleet at the moment and we also see broader opportunities in the corporate and government market as well. 

“So that’s another big area of growth for us. We have been building our capability in that area and we have been waiting for the supply of cars, which is starting to come through.”

Mr Noone said the focus now was on new cars over used cars “because corporate customers want five-star ANCAP.”

“We are retiring the older cars and bringing in brand-new cars. At the moment, about 50 per cent of our vehicle fleet is less than 12 months old.”

The company said that in June this year, it secured a new asset finance facility from a top-tier automotive financier to allow it to buy an additional 60 to 65 vehicles.

In its statement to the ASX, Carly said: “There was no benefit reflected in the FY22 results from this facility as no vehicles had yet been secured. 

“Despite difficult conditions in accessing the supply of new vehicles, the Carly team has been able to successfully place numerous orders and since late July 2022; 12 vehicles have already been received (with the majority already out on subscription), with another 41 to be delivered between September and November 2022.

“The facility has capacity for another 10 to 11 vehicles. The new finance facility is in addition to the purchase of 16 vehicles and the leasing of 39 vehicles during FY22. This facility substantially increases the size of the owned/leased fleet,” Mr Noone said.

By Neil Dowling