Cazoo has increased its retail gross profit per unit performance by 14% quarter-on-quarter as it sold 9,525 units in Q3.
The online used car retailer saw retail GPU reach £1,470, which Paul Whitehead, Cazoo chief executive, said was achieved by continuing to focus on “unit economics”.
Cazoo’s average retail GPU for the first nine months of 2023 was £1,215.
The business is still working to make a profit and is maintaining its adjusted EBITDA forecast at between a £100 million and £120m loss.
Whitehead said: “Looking ahead, we see further scope to sustain and grow our retail GPU by targeting opportunities in increased ancillary products sales, optimising our digital finance journey, improving inventory selection and turnover, and through increased efficiency in pricing, purchasing and logistics.
“During the quarter, we continued to reduce both fixed and variable costs in line with expectations, leading to lower cash utilisation.”
Cazoo has £151m in cash and cash equivalents plus approximately £35m of self-financed inventory as at September 30, 2023.
Whitehead expects the company to finish the year with between £100m and £115m of cash and cash equivalents and between £20m to £30m of self-financed inventory.
Given the impact of higher interest rates and cost of living on consumer demand, Cazoo is anticipating retail unit sales in Q4 2023 of around 8,500 with full-year retail sales at 40,000-42,000 units.
Cazoo is expecting average retail GPU for the full year to be better than the previous guidance, approaching £1,250 and the exit rate to be around £1,400, which it said ‘reflects normal market seasonality and the challenging economic environment’.
Whitehead said: “Our top priorities remain to continue to improve unit economics, reduce our fixed cost base and extend our cash runway, as we work towards our goal of reaching profitability.”