ASX ANNOUNCEMENT
29 JUNE 2022
JUNE 2022 QUARTERLY ACTIVITIES REPORT
Carly Holdings Limited (ASX:CL8) is pleased to present its consolidated cash flow report and business update for the quarter ended 30 June 2022.
Key highlights include:
Total Revenue in the June 2022 Quarter increased 7% vs March 2022 Quarter,
and increased 49% vs the June 2021 Quarter8% increase in Subscription Revenue vs March 2022 Quarter and 112% increase
vs June 2021 QtrSubscription Revenue was 51% of Subscription Transaction Value in the June
2022 Quarter vs 46% in the March 2022 QuarterSubscription Revenue contributed 92% of Total Revenue in the June 2022 Quarter vs 91% in the March 2022 Quarter
Subscription Revenue from Owned and Leased Vehicles increased by 18% vs March 2022 Qtr and contributed 45% of total Subscription Revenue
Carly continued to focus on higher margin and higher revenue opportunities currently provided by owned and leased vehicles. Despite a small reduction in Subscription Transaction Value and Cash Receipts from Customers due to the expected retirement of a number of asset light vehicles (third party owned vehicles), Subscription Revenue from owned and leased vehicles increased by 18%, contributing to an 8% increase in overall Subscription Revenue.
In the June 2021 Quarter, prior to the introduction of owned and leased vehicles, Subscription Revenue comprised 36% of Subscription Transaction Value, increasing to 46% in the March 2022 Quarter and reaching an all-time high of 51% in the June 2022 Quarter. Subscription Revenue is increasing at a faster rate (112% increase in June 2022 Quarter compared to June 2021 Quarter) than Subscription Transaction Value (47% increase in June 2022 Quarter compared to June 2021 Quarter) due to acquisition of owned and leased vehicles (where the entire Subscription Transaction Value is retained as revenue by Carly as vehicle owner), continued success in upselling customers to higher value and higher margin subscription plans and also general price increases.
The increase in Carly Subscriptions has been offset by a reduction in the traditional DriveMyCar and Rideshare Rentals, which saw a 66% reduction in Rental Transaction Value in June 2022 Quarter compared to June 2021 Quarter as the business transitioned its focus to car subscription. The net result across both components saw a 10% increase in the total of Rental and Subscription Transaction Value in the June 2022 Quarter compared to June 2021 Quarter. However, total revenue increased by 49% over the same period.
Carly has traditionally operated an exclusively asset-light vehicle fleet, where third party owners provide vehicles in return for owner fees. Since Covid-19 caused global disruptions to vehicle supply, Carly leveraged its data and experience about in-demand vehicles and commenced purchasing and leasing vehicles to access more vehicle supply channels and meet the increasing demand for car subscription services. This strategy has been very successful to date, with owned and leased vehicles generating substantially more revenue and gross profit per vehicle compared to vehicles in the asset-light fleet. The owned and leased vehicles continue to perform at a higher utilisation than initial expectations.
The success of the owned and leased fleet strategy emphasises the benefit of securing asset finance facilities to more rapidly expand the fleet size to support accelerated revenue growth. In June 2022 Carly secured a new asset finance facility from a top-tier automotive financier to support the acquisition of an additional 60 to 70 vehicles. Vehicle orders have been placed and the first deliveries are expected in August. These financed vehicles will replace the assetlight vehicles that are expected to retire in the remainder of 2022 due to reaching kilometre thresholds.
The graph below illustrates the uplift in Subscription Transaction Value and Revenue which is being driven by the high utilisation and lower costs of the expanding owned and leased vehicle fleet.
Product and Manufacturing Costs increased during the June 2022 Quarter, largely due to timing differences regarding vehicle insurance payments between the March 2022 Quarter and the June 2022 Quarter. Excluding this vehicle insurance payment timing difference Product & Manufacturing Costs increased by 10%.
Customer Acquisition Costs remained consistent with the March 2022 Quarter, however overall Advertising and Marketing Costs increased due to costs for Carly’s attendance at the Australian Automotive Dealers Association exhibition and digital advertising costs in the June 2022 Quarter.
Cash flows during the quarter included payments for:
- Research and development costs of $280,000 (YTD: $1,060,000)
- Product manufacturing and operating costs of $711,000 (YTD: $2,551,000)
- Advertising and marketing costs of $72,000 (YTD $316,000)
- Staff costs of $379,000 (YTD: $1,525,000)
- Administration and corporate costs of $71,000 (YTD $336,000)
- Leased vehicles comprising:
- Interest amounts of $20,000 (YTD: $61,000)
- Principal amounts $89,000 (YTD: $276,000).
Further details of the cash flows of the group are set out in the attached Appendix 4C.
Subsequent to the end of the June 2022 Quarter, the R&D tax incentive refund of $168,000 relating to FY21 was received.
Corporate
Payments to related parties and their associates in the June 2022 Quarter of $74,000 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 June 2022 Quarter, the Company maintained a cash balance of $0.8 million, a decrease of $0.8 million from the March 2022 Quarter. The receipt of the R&D incentive refund of $168,000 in the September 2022 quarter has increased the cash available to the Company.
The Directors closely monitor cash flows and funding requirements and are assessing all funding alternatives to ensure that the Company can continue to pursue the growth opportunities of the businesses. The Directors are very conscious of the cash flow requirements of the Group but also seek to ensure that funding is accessed at appropriate valuations so as to preserve value and limit dilution for all shareholders.
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
About Carly Holdings Limited
Carly Holdings Limited (ASX:CL8) investors.carly.co/ is listed on the Australian Securities Exchange. It is Australia’s leading listed company focused on providing innovative mobility solutions for consumers and the automotive industry. Carly Holdings operates www.Carly.co, Australia’s first flexible car subscription service and www.DriveMyCar.com.au Australia’s leading peer-to-peer car rental business.