DECEMBER 2023 QUARTERLY ACTIVITIES REPORT
ASX ANNOUNCEMENT
25 JANUARY 2024
DECEMBER 2023 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 2023.
Carly has continued to deliver on its business objectives, steadily increasing its fleet size, the number of active subscribers and subscription revenue, YoY and against the September 2023 Quarter. Following on from a strong September 2023 Quarter, subscription revenue increased by a further 16% in the December 2023 Quarter.
Carly unlocked access to a further $6 million of asset finance in December 2023 and placed orders for 109 vehicles valued at over $4 million, including 44 electric vehicles (EVs), with the first deliveries received in December. These newly ordered vehicles will continue to be delivered in March & June 2024 Quarters and will increase fleet size by 29% compared to 31 December 2023.
Key highlights include:
- 80% increase in Subscription Revenue vs December 2022 Quarter and 16% increase vs September 2023 Quarter
- 19% increase in Subscription Revenue Annualised Run Rate, reaching >$3.7 million, (based on $309,000 in the month of December) compared to ~$3.1 million at September 2023. Average Monthly Subscription Revenue continues to grow, reaching $281,000 per month in the quarter ($243,000 September 2023 Quarter).
- Unlocked access to $6 million Facility B of the $10 million asset finance facility announced on 22 March 2023 and placed orders for 109 vehicles, valued at over $4 million, equivalent to 29% of fleet size at 31 December 2023
- 18 vehicles were added to the vehicle fleet in the December 2023 Quarter, reaching a fleet size of 377 vehicles at 31 December 2023. A further 25 new vehicles have been added to the fleet in the first 3 weeks of January 2024
- A Sales and Customer Experience Manager commenced to oversee growth, subscriber experience and rollout of new subscription product features to consumers, corporate, government and not for profit sectors
- Successfully completed $2.85m convertible note issuance to support ongoing business expansion
Subscription Revenue increased by 16% compared to the September 2023 Quarter, and increased 80% compared to the December 2022 Quarter, driven by continued growth in the number of subscriptions and an increase in the number of new 2023 model vehicles. Total fleet size at the end of December 2023 was 377 vehicles, with owned and financed vehicles representing 69% of the fleet. Carly continues to invest in its owned and financed vehicles as well as source vehicles under its asset light model from preferred partners. This enables Carly to align its fleet with customer demand and take advantage of market opportunities to access vehicles using its own capital or access third-party vehicles when there is market supply.
While subscription growth continued to accelerate, additional investments were made in marketing and the vehicle fleet. Timing differences associated with the payment of fleet management costs, staff costs and recruitment fees, including non-recurring expenses, resulted in the Net Cash Used in Operating Activities increasing compared to the September 2023 Quarter. As the owned vehicle fleet expands, outgoing payments start prior to new subscriptions commencing, resulting in a lagging effect for cash receipts. Over time, as the vehicle utilisation increases, the net cash flow for vehicle subscriptions substantially improves.
As EVs move from the early adopter phase to early majority, Carly has, for the first time, purchased electric vehicles to assist individuals and business fleets transition to EVs by providing EVs to trial for 30 days or more. The ability to trial EVs provides real-world feedback on the benefits and potential/perceived challenges of adopting EVs on a larger scale and removes many of the current anxieties associated with the new technology.
Carly has begun to offer to customers the Carsales 2023 Car of the Year Winner and 5 Star ANCAP rated MG4 EVs in New South Wales, Victoria and Queensland, providing access to EVs suitable for mainstream adoption. These vehicles join the Hyundai Ioniq 5 and 2023 World Car of the Year Ioniq 6 provided by Hyundai Australia on an asset-light basis, which are already extremely popular with Carly’s individual and corporate subscribers.
An agreement was signed with Chargefox, Australia’s leading EV charging network enabling Carly to bundle EV charging packs with electric vehicle subscriptions, increasing the value provided to retail and corporate customers and simplifying the adoption of EVs for our customers. This relationship enhances Carly’s ‘try before you buy’ EV subscription proposition and reduces the barriers to entry for individuals and companies transitioning to electric vehicles. Carly and Chargefox intend to work together to jointly promote the proposition.
These latest results reaffirm that Carly is continuing to demonstrate success in three key objectives:
- Securing supply of vehicles in a timely manner that are then monetised by consumers and corporate customers
- Increasing overall Subscription Transaction Value and retaining a higher proportion as revenue
- Investing in a clearly defined strategy to accelerate subscriber growth and cash inflows
Marketing Initiatives
During the December 2023 Quarter, Carly continued to invest in growing market and product awareness, laying the foundations for continued growth in the consumer and corporate markets.
Employee Rewards
Carly completed the signing of agreements to enable the distribution of educational information and promotional offers to over 990,000 Australian employees via employer benefits programs. Carly will continue to use this channel to access a large segment of retail customers and establish car subscription as the more flexible alternative to long term finance and debt.
Radio Advertising
Carly took the opportunity to trial advertising in the Sydney region during October/November. 15 and 30 second commercials were aired on commercial stations and across digital radio platforms. Carly identified an increase in subscriber inquiries and will assess, as the fleet expands, the use of this marketing medium in the future.
Fleet Auto News
Carly secured a 6 month sponsorship of leading fleet industry publications Fleet Auto News and Fleet EV News to position Carly as the provider of choice for fleet managers seeking flexible access to vehicles and a smooth transition to electric vehicles.
Corporate
Payments to related parties and their associates in the December 2023 Quarter of $192,000 related to remuneration of the executive and non-executive directors for the period.
Cash Balance at Quarter End and Funding
At the end of the December 2023 Quarter, the Company maintained a cash balance of $3,116,000, an increase of $2,146,000 from the September 2023 Quarter.
On 30 November 2023, Shareholders approved the issuing of 2,850,000 convertible notes at an issue price of $1.00 per note, raising an additional $2,850,000 (Convertible Note) before transaction costs. This has provided the funding to deliver substantial growth in fleet size and subscription revenues in coming months.
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
Media Enquiries
The Capital Network
Julia Maguire
+61 2 8999 3699
E: julia@thecapitalnetwork.com.au
Investor Relations
W: investors.carly.co
E: shareholder@carly.co
About Carly
Carly Holdings Limited (ASX:CL8) is an Australian company leading the growth of the car subscription industry in Australia & New Zealand and supporting the transition to electric vehicles. Launched in 2019, Carly Car Subscription is a flexible alternative to buying or financing a vehicle, for individuals and businesses, with insurance, registration and servicing included in one monthly payment. Average subscription period is over 5 months. Carly has secured auto industry leaders SG Fleet (ASX:SGF) and Turners Automotive (ASX:TRA) as significant shareholders, joining long-term shareholder, RACV and OEM partner, Hyundai. For more information visit: https://investors.carly.co.