ASX ANNOUNCEMENT
29 JANUARY 2021
DECEMBER 2020 QUARTERLY ACTIVITIES REPORT
Carly Holdings Limited (ASX:CL8) is pleased to present its consolidated cash flow report and business update for the quarter ended 31 December 2020.
Key highlights include:
- 15% increase in Total Gross Revenue vs. September 2020 Quarter
- 2% increase in Subscription Transaction Value vs. September 2020 Quarter and 137% increase vs. December 2019 Quarter
- Carly Subscription increased to 59% of Rental & Subscription Receipts in the December 2020 Quarter vs. 23% in December 2019 Quarter
- Substantial improvement in corporate vehicle utilisation days, increasing from 64% in Sep 2020 Qtr to 82% in Dec 2020 Qtr
- 6% increase in Receipts from Customers vs. September 2020 Quarter
- 33% decrease in Advertising and Marketing costs vs. September 2020 Quarter
- 25% decrease in Admin and Corporate costs vs. September 2020 Quarter
- 9% decrease in Net Cash used (Excl. COVID related Govt support) vs. September 2020 Quarter
- Signing of vehicle supply agreements with leading automotive dealers – The Alto Group in New South Wales and Ringwood Mazda in Victoria
- Expansion of the electric vehicle fleet with the addition of Hyundai Ioniq EV and Ioniq PHEV vehicles
- Agreement signed with Genesis Motors Australia for the addition of Genesis luxury vehicles to the Carly and DriveMyCar platforms
- Completion of entitlement issue raising $2.355 million before costs, supported by Willoughby Capital, SG Fleet, management and existing shareholders
- Change of name to Carly Holdings Limited to better align with the main focus of operations and to leverage increasing brand awareness
- Completion of consolidation of capital
Collaborate Corporation Limited completed the name change to Carly Holdings Limited on 15 December 2020 to better reflect the links between the core operations of the business and the parent company’s identity and leverage increasing awareness of the Carly brand.
Total Gross Revenue increased by 15% in the December 2020 Quarter versus the September 2020 Quarter, supported by growth in Rental & Subscription Receipts. Carly Subscription increased to 59% of Rental & Subscription Receipts in the December 2020 Quarter vs. 23% in the December 2019 Quarter, once again reflecting the continued strong performance of Carly car subscription and its increasing importance to overall group revenues.
While growth was achieved in the December 2020 Quarter, the full growth potential of Carly Car Subscription, DriveMyCar and rideshare rentals was not achieved due to restricted supply of vehicles. The COVID-19 pandemic has caused significant disruption to global automotive supply chains which has resulted in a deficit of new cars in Australia and a substantial increase in the price of used cars. The limited supply of vehicles is being experienced by automotive dealers, corporate fleets and Carly alike. During this challenging period Carly has been successful in retaining its core fleet of vehicles provided by automotive manufacturers, dealers and fleet management organisations, however it has proven difficult to secure significant additional vehicles to keep pace with the level of demand.
Strong demand and restricted supply resulted in a substantial improvement in corporate vehicle utilisation days, increasing from 64% in September 2020 Qtr to 82% in December 2020 Qtr and a corresponding 33% decrease in Advertising and Marketing costs. At a number of price points, utilisation of vehicles was almost 100% for the entire quarter.
Despite the very tight supply constraints, Carly signed vehicle supply agreements with leading automotive dealers during the December 2020 Quarter, and continued to progress discussions with a number of other potential suppliers of vehicles. The Alto Group in Sydney has provided new Audi and Skoda vehicles for Carly and Ringwood Mazda is providing Mazda vehicles in Melbourne. Hyundai Motor Company Australia has expanded its offering in Sydney with the addition of 4 x Ioniq Ev & 3 x Ioniq PHEV electric vehicles. Genesis Motors Australia signed an agreement for the addition of Genesis luxury vehicles to both the Carly and DriveMyCar platforms.
To alleviate the vehicle supply issues and take advantage of the significant growth opportunity, Carly is negotiating with several parties to secure a reliable, committed supply of vehicles. Details will be announced upon signing of material formal agreements.
Consolidated Cash Flows
Receipts from Customers increased 6% in the December 2020 Quarter vs. the September 2020 Quarter. Further growth was tempered by COVID-19 related vehicle supply restrictions. The contribution from DriveMyCar, which is typically strong in the December Quarter, was lower in the December 2020 Quarter vs the December 2019 Quarter due to COVID-19 related travel restrictions and because a large proportion of vehicles normally available for rental were utilised by subscribers.
Advertising & Marketing costs decreased by 33%, Admin & Corporate cost decreased by 25% and Staff costs decreased by 2% resulting in 9% decrease in Net Cash used (excluding COVID-19 Govt Support) vs. September 2020 Quarter.
Payments to related parties and their associates in the December 2020 quarter of $84,000 related to remuneration of the executive and non-executive directors for the period.
Corporate
On 30 October 2020 a partially underwritten non-renounceable entitlement offer of shares and free-attaching options pursuant to the prospectus dated 14 September 2020 was completed. 68% of the total Shares offered under the Entitlement Issue were taken up, raising $2,354,725 before costs. The $850,000 Financing Facility provided by Willoughby Capital, together with accrued interest of $125,782 to 30 October 2020 was offset against commitments under the offer. The Entitlement Issue was offered to shareholders registered at the Record Date of 18 September 2020 on the basis of one (1) New Share for every three (3) Shares held, together with one (1) free attaching option for every five (5) New Shares subscribed for and issued. The Entitlement Issue was partially underwritten by existing shareholders of the Company namely SG Fleet Management Pty Limited and Willoughby Capital Pty Ltd as trustee for the Willoughby Capital Trust, alongside Directors of the Company Adrian Bunter and Chris Noone and Chief Operating Officer, Ben Hershman.
A change of name to Carly Holdings Limited was completed on 15 December 2020 to better align with the main focus of operations and to leverage increasing brand awareness of the Carly brand. The ASX code CL8 remains unchanged. A new investor website has been launched to highlight the Carly Holdings investment opportunity www.carly.co/investors. Following receipt of shareholder approval at the Annual General Meeting on 19 November 2020, the Company completed a 25-for-1 consolidation of capital. The purpose of the consolidation of capital was to implement a more appropriate capital structure for the Company going forward.
Cash Balance at Quarter End and Funding
At the end of the December 2020 Quarter, the Company maintained a cash balance of $1.325 million, an increase of $614,000 from the September 2020 Quarter.
The Directors closely monitor cash flows and funding requirements and are assessing all funding alternatives, which may include a placement to strategic and/or high-net-worth investors to ensure that the Company can continue to pursue the growth opportunities of the businesses. In response to the potential impact of COVID-19, Carly has taken a prudent approach to cash management and proactively implemented a range of cost saving measures.
This announcement was authorised to be given to ASX by the Board of Directors of Carly Holdings Limited.
Authorised by:
Chris Noone
CEO and Director
Carly Holdings Limited
For more information please contact:
Chris Noone
CEO and Director
Carly Holdings Limited
Jane Morey
Morey Media
M: 0416 097 678
About Carly Holdings Limited
Carly Holdings Limited is listed on the Australian Securities Exchange (ASX:CL8). It is Australia’s leading listed company focused on providing innovative mobility solutions for consumers and the automotive industry. Carly Holdings operates www.DriveMyCar.com.au Australia’s leading peer-to-peer car rental business, and www.Carly.co, Australia’s first flexible car subscription service.