CAR GROUP LIMITED — Interim / Quarterly Report 2011

Feb 22, 2011

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Automotive number one posts buoyant first half

Feb 23, 2 011

carsales.com Limited ( ASX: CRZ) t o day released its financial r e sults for the s ix months e n ding December 31, 2010. The results are c ategorised b y strong grow t h in both rev e nue and profit.

For the first six month s of the 2011 f iscal year th e company re p orted a 31 per cent increa s e in operatin g revenue s . The period y ielded a net p rofit after tax (NPAT) of $ 2 7.6 million. T h is represent s an increase o f 45 per cent co m pared to the s ame period i n FY2010 (H1 FY2010, $1 9 .1 million).

carsales.com Ltd’s Bo a rd of Directo r s has declar e d a fully fran k ed interim di v idend of 9.4 c ents per sha r e (H1 FY2010, 6.6 cents per share) to be p aid on April 2 0, 2011. The record date f o r the dividen d payment is A pril 6, 2011.

RESULTS OVERVIE W

			$A Millions	$A Millions	Growt	h
Half Ye ar Ending 31 Decemb er 2010			H1 FY 2010	H1 F Y2011	$'s	%
Operati ng Revenue (Excluding In terest Revenu e)
Online Adv ertising			48 .2	6 3.4	15.2	32%
Data & Re search			6. 8	8.4	1.6	24%
TotalO perating Re venue			55 .0	7 1.8	16.8	31%
Operati ng Expense s(Before Inte rest and D&A)			26 .3	3 2.0	5.7	22%
EBITDA			28 .7	3 9.8	11.1	39%
EBITDA Margin			52 %	5 5%
D&A			1. 1	1.3	0.2	18%
EBIT			27 .6	3 8.5	10.9	39%
Net Inte rest Expen se			0. 2	( 0.3)	(0.5)	(250%)
Profit B efore Tax			27 .4	3 8.8	11.4	42%
Income Tax Expen se			8. 3	1 1.2	2.9	35%
Net Pro fit After Ta x			19 .1	2 7.6	8.5	45%

carsales.com Ltd oper a tes a network of websites including Au s tralia’s numb e r one autom o tive site, carsales.com.au. The c ompany als o provides dat a , pricing and specification services via i t s affiliate, Re d book; plus ser v ices to automotive and alli e d industries’ r etail and wh o lesale sector s .

carsales.com Ltd’s ne t work of sites s erved more t han 295.3 mi l lion pages in December 2 0 10, accordin g to Nielsen O nline, Marke t Intelligence. In terms of p a ges served, c arsales mobile site and iP h one apps co m bined also sur p assed the de s ktop sites of all major competitors.

carsales.com Ltd CEO and Managing Director, Greg Roebuck said the c o mpany’s str o ng first half E BITDA growth w as underpinn e d by revenu e growth acro s s the busine s s.

“Many o f the sectors in which cars a les.com trad e s exhibited c o nsistent gro w th in the latter half of 2010 and that’s ref l ected in our s trong revenu e s.

“All our k ey revenue li n es posted in c reases. We’r e particularly p leased with the strength o f growth in au t omotive display advertising but also note the continued gr o wth and performance of t h e private adv e rtising mark e t across automoti v e and other v erticals,” Mr R oebuck stat e d. “Our priv a te sellers rec o gnise that w h at we do wo r ks and this has s purred our g r owth in this i m portant area of the business.”

• According to Mr Roebuck Operational and Strategic Highlights during the six-month period included:

• Robust automotive inventory and increased enquiry volumes (up 16% on pcp).

• Continued strong double-digit automotive private ad volume growth on pcp.

• Greater penetration into new car market (new car in stock enquiry grew by 46% on pcp).

• Display advertising revenue up 69% on pcp.

• Continued solid growth from all other non-auto verticals

• Strong new product growth including relaunch of general classified site quicksales.com.au and mobile products in both auto and non-auto verticals

• Continued growth in brand awareness

Considering 2011 and trading conditions moving forward, Mr Roebuck said that carsales.com Ltd expected to benefit from a robust local automotive marketplace. He stated that while some non-auto categories may be adversely affected by the weather events of early 2011, overall carsales.com Ltd’s trading conditions are expected to remain good.

Mr Roebuck stated carsales.com Ltd expected NPAT for H2 to be well up on H2 FY2010 and will be similar to or slightly better than H1.

“Our thoughts and best wishes are with our customers, both consumers and dealers, that were hit by the extraordinary events at the start of 2011. Our teams have been working closely with them, wherever we can assist, albeit in a small way, to get them up and running as soon as possible,” Mr Roebuck explained.

“Overall, however, the majority of the markets in which we operate are performing strongly and we expect those conditions to continue. With this in mind we will continue to expand our new product offerings across both auto and non-auto verticals.

“In H1 we’ve exhibited strong revenue growth in all key lines and the evolution of the online space continues with private and display advertising performing particularly well. carsales.com Ltd has worked hard to broaden our revenue base and that effort is gathering momentum,” Mr Roebuck stated.

While non-auto streams have exhibited good growth, carsales.com Ltd’s automotive business remains key to overall performance and opportunity in H2.

“With over a million new cars sold in 2010 and an unprecedented level of new model activity in the local new car marketplace, there’s plenty of interest on which to capitalise. Couple this with relatively static interest rates and the strong value of the Australian dollar and there are indications that new car sales will again be strong in 2011. This has a flow on effect through the entire automotive marketplace,” Mr Roebuck stated.

“Mobile internet growth has helped further accelerate the shift of a range of traditional revenue streams online, but we believe we are still at the thin edge of the wedge. As more customers move online via desktop and now mobile devices, they are demanding better, smarter services and we believe we are well placed to continue to provide them,” he said.

For further information, please contact:

Greg Roebuck CEO and Managing Director 03 9093 8600

About carsales.com Ltd.

carsales.com Ltd listed on the ASX in 2009 and is the largest online automotive, motorcycle and marine classifieds business in Australia, attracting more Australians interested in buying or selling cars, motorcycles and boats than any other classified group of websites. carsales.com Ltd’s first revenues were reported in the financial year 1998. The company is one of only a few to have made the BRW Fast 100 for five consecutive years. carsales.com.au is Australia’s number one automotive

website and in December 2010 attracted 3.94 million unique visitors. The Carsales Network of websites includes CarPoint.com.au, discountnewcars.com.au, Redbook.com.au and motorcycle, boat, truck and machinery websites. The network boasted in excess of 4.6 million unique visitors* in December 2010.

* Nielsen Online Market Intelligence, Automotive, Brand, December 2010

** Nielsen Online Site Census, Carsales Network Aggregate, December 2010