Carwow's losses increase to £29.6m amid sector challenges

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【Summary】Carwow, an online car marketplace, experienced a turbulent year in 2022, with pre-tax losses doubling to £29.6m. The company attributed this to various factors, including the fallout of the Ukraine war and an increase in energy prices leading to inflation and a drop in consumer confidence. Despite the challenges, Carwow continued to expand its business and invest in new offerings, such as its Sell My Car service.

FutureCar Staff Oct 10, 2023 11:25 PM PT

Carwow's losses increase to £29.6m amid sector challenges

Last year proved to be a challenging period for Carwow, as the company experienced a significant increase in pre-tax losses. These losses rose by 119% to reach £29.6m, while turnover saw a more modest increase of 9% to reach £39.9m.

Despite these financial difficulties, Carwow managed to expand its operations in the UK, Germany, and Spain throughout the year. However, the company noted that the market conditions deteriorated after a strong first quarter.

In its accounts filed at Companies House, Carwow attributed this market decline to various factors, including the fallout of the Ukraine war, an increase in energy prices, rising inflation, central bank interest rate hikes, and a severe drop in consumer confidence.

Despite the challenges faced, Carwow continued to invest in its Sell My Car business and expand its presence on YouTube. The company's UK channel saw a 20% increase in subscribers, reaching a total of 7.8 million.

Carwow's CEO, John Veichmanis, acknowledged the turbulent year for the automotive industry as a whole, but also highlighted the positive impact of the company's strategic investments. These investments included the development of the Sell My Car service and significant investments in the OEM media product.

As a result of these decisions, Carwow is optimistic about its prospects for 2023. The company has already seen a dramatic upturn in revenues and profitability year-to-date. It is forecasting revenues to exceed £50m, a significant increase from the previous year's £39.9m.

Carwow's dealer numbers continue to rise, and the company is experiencing a record level of investment from OEMs who choose to promote their new products through the platform. Group monthly profitability has improved significantly in 2023, with the UK business already reaching break-even.

Carwow's cash position remains strong, allowing the company to continue making strategic investments to drive sustainable growth across all its markets.