Carsales share price on watch as full-year profit jumps 23%

The company's final dividend also improved 9% to come in at a fully franked 24.5 cents.

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Key points

  • The Carsales share price could be one to watch today after the ASX 200 automotive classifieds company released its results for financial year 2022
  • Carsales posted higher revenue, EBITDA, and profits last financial year than it did in financial year 2021
  • And the company expects its growth to continue this fiscal year

The Ltd (ASX: CAR) share price is in focus on Monday after the automotive classified company released its full-year earnings.

The Carsales share price closed Friday's trade at $21.65.

Carsales share price in focus amid full-year earnings

Here are the highlights of the company's FY22 results:

The company's revenue lifted amid a strong domestic performance from its private and media segments, its Korean Encar business, and revenue from the TyreConnect business (acquired in July 2021).

Its Australian adjusted revenue lifted 18% last financial year while its adjusted EBITDA rose 10%, excluding wage subsidies. Overseas, it delivered double-digit revenue and EBITDA growth.

The company's revenue and EBITDA lifted 11% and 16% respectively in the US, while those same metrics rose 17% and 16% respectively in South Korea.

Brazil posted the best increase, however. Carsales' revenue gained 26% in the South American nation while its EBITDA lifted 23%.

What else happened in financial year 2022?

The major news from Carsales last financial year was its acquisition of the remaining 51% stake in Trader Interactive. It underwent a capital raise to snap up the stake for approximately $1.17 billion.

The Carsales share price crashed 12% on the back of the news, released in late June.

The company also launched its Australian online buying service carsales SELECT in August 2021.

What did management say?

Carsales CEO Cameron McIntyre commented on the company's full-year earnings, saying:

Our team have worked hard to deliver an excellent operational and financial performance while continuing to deliver our strategy and invest in future growth opportunities including progressing the acquisition of the remaining 51% of Trader Interactive in the US.

We continue to see robust levels of demand in all our key markets, reflecting the strength of our market position and the resilience of marketplace businesses through economic cycles.

What's next?

Carsales didn't provide any additional guidance today. Though, it did outline its expectations for financial year 2023.

The company expects to deliver "very strong growth" in adjusted revenue and EBITDA on an actual basis this financial year.

That will likely be driven by strong underlying automotive conditions in both dealer and private markets, as well as growth in its media and investments segments.

Carsales share price snapshot

While Carsales' earnings have been on the up and up lately, its share price has struggled.

The stock is currently trading 13% lower than it was at the start of 2022. It has also fallen 5% over the last 12 months.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has slipped 7% year to date and 7% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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