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They have a minuscule share of the market but are cash rich now. Lookers property portfolio valued at 77p/share, never mind what the business is worth, generating £50+ million/year. If Cazoo grows, they will need staff, premises and infrastructure to expand their business model. A bid at £1 plus looks inevitable.
Yes I saw this and in all honesty it looks like Cazoo will be on to a winner and could list in UK as well.
So much for those that said in the last few months that Cazoo set-up and business model would not work in the UK and Cazoo would be short lived. Unfortunately Cazoo could / will take car sales from Looker's and others over the next 6 - 9 months.
But I still think Lookers is worth £1 and surprised T.B hasn't as yet made a full takeover offer.
A company which supplies food to care homes and restaurants says it is taking "drastic action" to try to get round the shortage of UK lorry drivers.
The boss of Country Range said the group was buying smaller vans in the face of "significant" problems caused by a lack of qualified HGV drivers.
https://www.thetimes.co.uk/article/cazoo-revs-up-8bn-float-us-stock-market-0vt5vv9sz Be interesting to see what happens on Friday with the $8 billion float. Wait till comparisons are made with Lookers monthly used car sales, stock and profitability. Yes profit, a dirty word for these spac flotations. When will the market wake up?
Vertu and Marshalls have both issued strong trading news recently. Vertu have today increased their 2021 profit forecast by around 25% due to very strong used car trading. Why should we be different? Be nice to hear that from the horse;s mouth of course!
Showing how its done....This crowd are probably not up yet.
Just 10% of car buyers want wholly-online retail experience
Just 10% of UK car buyers plan to embrace a wholly online car retail experience facilitated by click and collect or click and delivery, JudgeService survey data has revealed.
The newly published State of the Nation Industry Report 2021 polled the views of 2,150 car owners and found that, despite an acceleration of online shopping and omnichannel car retail during COVID-19 lockdown periods, fe consumers want to purchase their next vehicle online.
In findings which appear fly in the face of the perceived momentum behind online car retail businesses like Cazoo, cinch and carzam, JudgeService reported that 73% of car buyers still want to visit a dealership in person.
Online retail options were most appealing to buyers aged between 36 and 45 – where 13% said they are likely to use one of these services – according to its findings.
Neil Addley, managing director at JudgeService“Our findings challenge the popular view that younger buyers are more likely to buy a car online, either by delivery or click and collect,” said Neil Addley, managing director of JudgeService.
“However, the actual results couldn’t be more different as a clear majority of buyers, across all age groups, want to visit a showroom in person to buy their next car.”
How can Cazoo’s business be worth 20 X more than lookers?
For many City fund managers, the answer’s simple. It isn’t.
As one of the biggest, who has shares in traditional dealers, puts it: “Cazoo is a bubble. Pure and simple. Possibly one of the biggest ever. And when it pops, a lot of people are going to feel it.”
A reknowned short-selling hedge fund investor with a nose for such things agrees: “He’s a clever guy, no doubt, Chesterman. But I’m afraid this one is heading for a nasty fall.”
According to him, the tycoon has created his business just as technology company valuations have gone berserk.
Pretty much all tech stocks went into orbit last year as big money went chasing The Next Big Thing after Covid left interest rates at zero or lower.
Coverage of the used car market growth of the front page of the FT. MMH stunning results yet only 4% rise so Mr Market isn't listening. Cazoo noise drowning out everything else. BOD should be thinking about buybacks.
MMH results are stunning and we will surely rise as investors realise we will gainfrom same market conditions.
Doesn't seem to have hurt Look price today?
So what's going to happen to the markets when at 9 am they release the new shock climate reort, will there be any / many stocks taking a hit like the car sector with Pend and Look ?.
Great to see Director buys of 50000 shares. Bodes well. Will be buying more on any dips to the low-mid 60s.
Some people think that the PLCs in the Automotive sector are having a one-off profits bonanza, however this could not be further from the facts, all main franchise dealers have never been so lean and mean, they have all finally weakened up and understood that its profit that is of interest and not market share.
The supply of new and used cars has indeed been challenging but all new orders now being taken have resulted in an extremely strong order book through to the beginning of Q2 2022.
Cazoo and Cinch are now in a market where as of the end of July Only 2 per cent of cars are bought online at present.
They have an abundance of money and the only way Cazoo and Cinch can survive is to buy profit, this will come from them taking out a clean large automotive PLC, guess who’s the most audited Automotive plc in Europe, who is making circa £80m per year and is only valued at £270m???
Looks like someone was in hurry to dump a lot of stock today.
should have said loss making unicorns - of course
I agree, I don't see it working but then again I am old and accept that millennials and younger don't think like me, or you I suspect.
In in investing in takes 2 points of view to make a market.
They have a USP - they are not used car salesmen - even if they are selling used cars
They don't have anything like the overhead that traditional retailers have.
They have mega advertising budgets.
In a market like todays, they don't need to make money. How many unicorns are valued at astronomical valuations but still attract captial
With the capital they have already raised they can keep going for a very long time.
Investors invest because they like the story and expect someone else will but their shares at a higher price.
Even if their valuations come down the fact they are in the market will take volume form traditional retailers.
This last point is what is holding LOOK and other retailers back. If you are expecting a re-rate based on Cazoo not doing very well I think you may wait for quite a long time,
By the way, I say all of the above as a holder here. I think the market will slowly walk the SP. The big mistake which i hope the rectify in the H1 result is a commitment to SP capital returns. As far as I can see they have no reason not to do this give their balance sheet. This would give the SP the boost it needs.
CAZOO IS DESTINED FOR FAILURE, JSUT ASK ANY TRADITIONAL MOTOR DEALER FOR THEIR STATS ON HOW MANY PEOPLE NOW USE CLICK AND COLLECT V WHEN WE WERE IN LOCKDOWN, 97% OF THE PEOPLE NOW WANT TO VISIT THE DEALERSHIP TO COLLECT THEIR VEHICLE, 98% WILL NOT PURCHASE PRIOR TO HAVING A TEST DRIVE OF A USED VEHICLE SINCE LOCKDOWN EASED.
It is interesting to note this morning at 1000hrs Cazoo and Cinch had a combined stock holding over just 6350 vehicles.
Lookers and Pendragon have a stock holding of just under 19000 vehicles.
Vertu and Lookers will report annual profits of around £150m combined for 2021.
Cazoo continues to be loss making and has a valuation of £5bn
After all, many established car dealerships sell way more cars than Cazoo. Pendragon, one of the UK’s biggest dealerships, has 16,000 used cars listed on its website compared with Cazoo at around 3400.
How can Cazoo’s business be worth 20 X more than lookers??
For many City fund managers, the answer’s simple. It isn’t.
As one of the biggest, who has shares in traditional dealers, puts it: “Cazoo is a bubble. Pure and simple. Possibly one of the biggest ever. And when it pops, a lot of people are going to feel it.”
A reknowned short-selling hedge fund investor with a nose for such things agrees: “He’s a clever guy, no doubt, Chesterman. But I’m afraid this one is heading for a nasty fall.”
According to him, the tycoon has created his business just as technology company valuations have gone berserk.
Pretty much all tech stocks went into orbit last year as big money went chasing The Next Big Thing after Covid left interest rates at zero or lower.
Exactly this.
Why cant they find a new chairman? No-one wants the job I suppose, although the brighter outlook should help.
Financial Position
The Board retains its focus on cash management and liquidity. At 30 June 2021, the Group had a net cash balance of approximately £30m compared to net debt of £11.0m last year and £40.7m at 31 December 2020. The Group has a revolving credit facility for an initial £150m which was recently extended to 30 September 2023. The Group's balance sheet remains underpinned by a valuable property portfolio of c£300m (77p per share).
So net cash £30m and property at 77p / share we must be worth 85p p/s on assets alone. Enterprise value must be 100p I would think. Very vulnerable to a smash and grab. Only negative is the BOD still needs cleaning up with some highly ethical city replacements to make this jump another 25p and maybe that’s a work in progress (Fingers crossed).
I was able to buy this morning at less than less than 70p.
I sold at over 70p on 1/7 after results.
If this RNS had meant anything then surely the share price would have rocketed?
It's more or less where it was at when results were released on 1/7.
It will take time for confidence to be restored in these BOD muppets.
But I hope it does.
The reality of the used car market is that stock is so short and ever increasing in value that the "disrupters" can't disrupt. Dealer groups also have other income streams available: Aftersales make more money than car sales, fleet business etc that used car boys just don't have. Dealer groups also can retain more new car part exchanges for retail which is better than buying through remarketers.
The company will make in excess of £80m this year, their property portfolio is valued at 77p per share and the whole lot is only valued at £263m.
The stock is miles undervalued and will be re-rated.
Cazoo and Cinch continue to miss their targets and as soon as the City realise that their models do not work all PLC motor sector stocks will fly…..