CAR Group Shares Climb 3.7% After Announcing Exit From Australian Tyres Business

3 min read | January 14, 2025 11:47 AM AEDT | By Team Kalkine Media

Exit From Australian Tyres Business

CAR Group’s Australian Tyres business, which included the wholesale division TyreConnect and the e-commerce platform tyresales.com.au, has faced ongoing difficulties in achieving sustainable profitability within a highly competitive retail and wholesale tyre market.

The company has reached an agreement to sell specific assets of TyreConnect to a third party, with the transaction expected to conclude by the end of February. While the deal will incur exit costs, including redundancies and asset write-downs, management clarified that these costs are not material and will be treated as abnormal items, excluded from pro forma and adjusted reporting results.

The tyresales.com.au platform, meanwhile, will cease operations effective immediately, as it was not included in the asset sale.

FY25 Guidance and Strategic Focus

CAR Group used this announcement to reaffirm its outlook for FY25, highlighting expectations of "good growth" in pro forma revenue, EBITDA, and adjusted net profit after tax (NPAT) on a constant currency basis. Management also anticipates maintaining similar pro forma EBITDA margins to FY24, which stood at an impressive 55.8%.

In FY24, the company achieved pro forma revenue of AU$1,041 million, EBITDA of AU$581 million, and adjusted NPAT of AU$344 million. With a continued focus on its core digital marketplace businesses, CAR Group aims to build on this solid performance.

Expanding Global Reach

Following the exit from the Australian Tyres business, CAR Group’s portfolio will now consist of prominent digital marketplace businesses in Australia (carsales), South Korea (Encar), the United States (Trader Interactive), and Chile (chileautos). Additionally, it holds a majority stake in Webmotors, a leading platform in Brazil.

Management highlighted that this realignment will enable the company to concentrate resources on its global operations, which have proven to be key growth drivers.

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