Reduced public transport use, international travel bans and flexible work arrangements have combined to lift underlying earnings growth at carsales.com and prompt an increased dividend payout.
The online car sales business will issue an interim dividend of 25 cents per share for the first half of 2020/21, up 14 per cent on the same period last year.
It comes as the business reports a two per cent decrease in adjusted HY21 revenue to $210 million, but an 18 per cent boost in adjusted earnings to $126 million and a 17 per cent jump in net profit to $74 million.
However reported revenue and net profit declined over the six-month period, which carsales.com attributed in part to COVID-19 dealer support packages.
carsales.com chief executive Cameron McIntyre said the business had enjoyed a 20 per cent spike in global traffic to its websites over the six-month period.
He also said that since the start of the COVID-19 pandemic, carsales.com had supported Australian dealers to the tune of almost $40 million.
“We have seen accelerated migration to digital platforms across our global network of sites as evidenced by strong traffic growth,” Mr McIntyre said in a statement.
“Demand for vehicles across all our markets has been strong due to lower public transport use, the absence of international travel and the evolution of more flexible working arrangements.”
In the business’s Australian arm, underlying earnings growth sat at 13 per cent, while private listing volumes recovered in January to pre-COVID levels.
carsales.com said listed Australian cars on the website had sold much more quickly in HY21, with an increase in first-time car buyers and people adding a second car to their household. This reduced total inventory levels.
Revenue and earnings also grew strongly in South Korea and Brazil.
“Our international strategy of investing in number one players in large, attractive and under-penetrated markets continues to deliver strong results,” Mr McIntyre said.
Shares dipped in the business by 4.25 per cent just before 11am on Wednesday, sitting at $21.16.
carsales.com stood down around 250 employees in April 2020 as business slumped about 25 per cent following restrictions imposed to check the spread of coronavirus. However the business rebounded in subsequent months as economies reopened.