British online automotive marketplace CarWow reduced its operating loss to £5.9 million ($8 million U.S.) in 2020, according to its latest financial statements, mainly due to an improved performance in Germany.
The pre-tax loss was £6.6 million but the performance is an improvement on 2019 when the company made an operating loss of £13.9 million ($18.9 million U.S.). Total revenue increased by 5.5% to £22.5 million, up from £21.3 million in 2019. The reduced loss is mainly due to £6 million fewer administrative costs, according to the document filed at the U.K.’s Companies House.
An extract from the report explains the lower overhead costs. It states: “The majority of the cost base of the group is variable with marketing being the biggest level of expenditure and therefore curtailed accordingly.”
The company sells new cars and operates in Spain and Germany as well as the U.K. and the business was more successful in mainland Europe than it was in the U.K., where revenue dropped by 14.3% to £13.2 million, down from £15.4 million in 2019.
In Europe, starting from a lower revenue base in 2019, turnover increased by 57% to £9.3 million from £6 million. In Germany, revenue went up by 65% to £7.8 million, whilst in Spain it grew 7.7% to £1.4 million in its second complete year of operating.
CarWow said that the numbers should be seen within the context of a fall in individual countries car registrations which were down 27% in the U.K., 28% in Spain but just 12% in Germany.
It said revenue increased in some areas because of an increase in online leads from dealers, manufacturers investing in tactical advertising and increased advertising through CarWow’s YouTube channel, which grew its subscriber numbers in 2020 by 61% to 5 million by the end of 2020. As of Oct. 5 2021, this has increased further to 6.26 million.
CarWow received £456,994 from the U.K. government through its Covid-19 grant and support schemes to subsidise salaries and a further amount equivalent to £69,861 from Germany. In Spain the company suspended wages as the system there sees the government pay employees directly. The average number of employees fell from 234 in 2019 to 207 in 2020.
CarWow said in the financial statement that it has performed in line with the budget for the first four months of 2021 (the accounts were signed off in May) and based on current trading forecasts expect to continue this trend throughout the year.
In June CarWow acquired used car buying platform Wizzle for an undisclosed sum to put together a fully online car buying and selling site. In September it reported it had 7,000 used cars available for dealers to buy directly from CarWow customers on the new site.