The online car seller Cazoo has fallen into administration and administrators from Teneo have been appointed to sell of the remaining marketplace business.
Serial entrepreneur Alex Chesterman founded Cazoo in 2018 and since March he has axed 728 jobs as part of a heavy cost-cutting restructuring programme in an effort to stay afloat.
Matt Mawhinney, joint administrator at Teneo, said, “Following our appointment, we continue to progress discussions with a number of interested parties on the marketplace business and remaining customer collections centres.
“The marketplace model is performing ahead of expectations, with strong dealer sign up, and the administration appointment provides us with an opportunity to secure a sale of the business over the course of coming weeks.”
Last October Cazoo reported an average retail GPU of £1,215 in the first nine months of 2023.
Cazoo then upgraded their expectations for the average Retail GPU for 2023 to approach £1,250 and anticipate to exit the year at ~£1,400 Retail GPU reflecting pressure on profitability expected in the last quarter of the year due to seasonality and the higher interest rates environment.
The company has also achieved the planned reduction in fixed and variable costs. Consequently, our forecast for adjusted EBITDA remains unchanged at £100 million to £120 million for 2023.
Due to the Transactions-related costs that are being incurred in the third and fourth quarters, their cash balance at the end of 2023 is expected to be between £100 million and £115 million with between £20 million and £30 million of self-financed inventory.