Carsales’ three key marketplace businesses in Australia, South Korea and Brazil all showed strong growth in the past financial year to result in the highest annual net profit growth for the company in seven years.

Net profit for the period was $131 million, up nine per cent and the best since 2014.

The result was assisted by its minority purchase in the US-based Trader Interactive marketplace site that deals primarily in recreational vehicle, powersports, truck and equipment markets.

In the six months of owning an interest in Trader Interactive, Carsales reports that the US business has seen a 12 per cent rise in revenue and a 25 per cent increase in earnings compared with the same period in 2020.

Carsales said that international growth was strong in South Korea and Brazil with a four per cent rise, but weakened in Australia to two per cent because of the impact in COVID-19. It noted that the second six months of the financial year in Australia was better, with an eight per cent growth.

In Australia, private sales listing volumes were strongly up during the year in all states except NSW, while Carsales noted that its Tyresales subsidiary operated at lower volumes in July 2021 because of the lockdowns in NSW and Victoria.

The company also expected core expenses to be higher this financial year compared with FY21 “largely reflecting the absence of wage subsidies”.

Carsales CEO Cameron McIntyre said the COVID-19 environment was “very challenging” for the company but he saw positives in the strength of the company’s business model.

“Pleasingly, the accelerated digitisation in the automotive industry and changes in consumer behaviour are creating new growth opportunities for Carsales, which positions us well for FY22 and beyond,” he said in a statement to the Australian Securities Exchange (ASX).

“We are well placed to bring more of the car buying and selling process online and to help our dealer customers add digital retaining capability to their current offering.

“We have provided significant financial support to our costumes throughout the pandemic. 

“Whilst this has impacted on our financial performance, it has strengthened our relationships with our customers and helped them to endure challenging periods and come out of the pandemic in a strong position.”

Mr McIntyre added that the pandemic had accelerated migration to digital platforms across the Carsales global sites as shown by strong traffic growth.

“We are excited about our acquisition of Trader Interactive which will add to our inevitable portfolio of international assets and provide a strong platform for future growth,” he said.

By Neil Dowling