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spk05: Greetings. Welcome to the GAZOO 3Q21 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I will now turn the conference over to your host, Robert Byrd, Director of IR and Corporate Finance. You may begin.
spk07: Good morning, everyone. Thank you for joining the Kazoo Q3 earnings call and webcast, which we have just released and can be found on Kazoo's investor relations website at investors.kazoo.co.uk. We appreciate everyone joining us today. With me on the call is Alex Chesterman, founder and chief executive officer, and Stephen Marana, chief financial officer. Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're all familiar with. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see the filings of Kazoo Group Limited with the SEC. Now, I would like to turn the call over to Alex, who will be followed by Stephen, and then there will be a Q&A session at the end.
spk08: Thanks, Ross. Good morning, and thank you to everyone for joining us today. We're delighted to be hosting our first earnings call as a publicly listed business on the NYSE, and we're excited to be sharing our record financial results for Q3. This has been a landmark quarter for our company. Not only did we successfully enter the public markets in August, raising proceeds of approximately $836 million net of fees to further accelerate our growth, but we also set many records across our key financial metrics, as well as making significant progress towards our long-term strategic ambitions. It's becoming very clear that our market-leading brand and fully digital world-class proposition is resonating strongly with consumers, and that the shift to online car buying and selling is accelerating. Customer feedback remains overwhelmingly positive, And our recently launched car buying channel, where we now buy cars directly from consumers, is being embraced by consumers and performing well ahead of initial expectations. We're extremely excited about the significant opportunities ahead and are more confident than ever that we will transform the car buying and selling experience in the UK and across mainland Europe when we launch there in the coming weeks. Before we go into the detail of some more recent events, I thought it would be useful to begin today's discussion with a reminder of our mission and why we are very well positioned for continued long-term growth. After that, I'll discuss our third quarter performance and outlook, and we'll then turn the call over to Stephen to walk you through our third quarter financial results in more detail. As we've shared with many of you, our mission at Kazoo is simple. We're pioneering the shift to online car buying and selling across the UK and Europe. A $700 billion market with less than 2% digital penetration, lagging almost all other retail sectors and ripe for digital transformation. It's an incredibly fragmented space with around 180,000 dealerships across the top 10 markets in Europe and no incumbent with more than a small single digit percent market share. By leveraging data and technology to improve selection, quality, transparency, and convenience, we're providing consumers with a far superior overall experience. Given these market dynamics, we launched Kazoo in 2019 to make buying and selling a car as simple and seamless as purchasing any other product online today. We've developed a powerful data and technology platform alongside critical physical infrastructure and a market-leading brand to create a world-class online retail proposition. We recondition, store, and deliver all our cars, allowing consumers to simply and seamlessly buy, sell, finance, or subscribe to a car entirely online. I want to highlight some of the key competitive strengths that are helping to build moats around our business and will enable customers our continued growth. First, our fully integrated business model and comprehensive proposition is delighting our customers. We have a world-class consumer NPS of approximately 80 and Trustpilot rating of 4.7 stars with 93% of our users rating their experiences either excellent or great. Second, we've developed unique capabilities with a market-leading technology platform a team of data analysts, and an end-to-end infrastructure network of vehicle preparation centers, customer collection centers, and car delivery transporters, underpinning our growth and profitability. Third, we've assembled a world-class team with a proven track record of accomplishments, including significant public market experience. Our senior team has been assembled from some of the leading digital consumer retail businesses across Europe. Finally, we have significant expertise and a track record of identifying and executing game-changing strategic deals. Over the past 18 months, we've made seven acquisitions and signed a number of commercial partnerships to accelerate our growth and enhance our team and proposition. As a result, we now have 11 of our own vehicle preparation centers in the UK, as well as four in mainland Europe in partnership with third parties. We've also opened 20 customer centers across the UK over the past 15 months, and we're the leading consumer car subscription player in Europe with subscribers across the UK, France, and Germany. Our ability to create a transformative consumer experience, a highly recognizable and trusted brand, and a world-class team within one of the single largest retail markets ripe for disruption is has allowed us to build one of the fastest growing businesses in Europe. Taking this all together, we've built a powerful business model with a clear pathway to long-term sustainable growth. Turning now to our third quarter performance. Our results reflect our continued growth trajectory as we leveraged our brand and unique platform in the UK, which we're in the final stages of preparing to replicate in mainland Europe. our third quarter revenues increased 267% to £174 million, and our retail gross profit per unit increased by over £1,000 year-on-year and now sits at £801, up significantly from £467 in Q2. That's not to say that Q3 wasn't without its challenges, some of which may continue in the short term. We've endured shortages of staff as a result of COVID, and shortages of inventory as a result of logistics issues relating to driver and fuel shortages, all of which hampered retail volumes to some degree, but are all short-term issues, none of which we expect to have any long-term effect on the business. Ultimately, our record revenue performance came despite the fact that we had suboptimal levels of inventory available on our website during the period. indicating demand for our offering was even stronger than our results show. The biggest constraint to growth remains our ability to recondition cars in the volumes required to meet dramatically increasing consumer demand. But we've recently made a number of strategic moves to improve and increase our reconditioning capacity. We firmly believe that owning the reconditioning process brings significant operational and financial advantages, and our decision to bring reconditioning in-house in the UK ahead of schedule earlier this year was exactly the right thing to do, but bringing that process in-house has led to a recent dip in vehicles available for sale during the transition. Despite continued gains in production capacity and in improving the selection for our customers, our website inventory levels are still much lower than we would like them to be. We strongly believe that had we had greater stock levels available on the website, we would have sold even more retail units in Q3 and therefore continuing to scale our reconditioning output remains a key priority. Through the remainder of the year, we expect to make additional progress in growing our inventory levels and the acquisition of SMH has provided us with significant additional reconditioning capacity to support our future growth. Moving to profitability, Our retail GPU has increased again to over £800 in Q3, up from £467 in Q2, and an increase of more than £1,000 year-on-year, driven by our improved buying mix, continued operational efficiencies, and greater attachment rates of our ancillary revenue streams. In July, we successfully launched our car buying channel, purchasing vehicles directly from consumers. Previously, we only purchased cars from consumers as a part exchange or trading when they were also buying from us. Consumers have embraced our new and unique and differentiated offering with uptake to date well ahead of our expectations. And we've been very encouraged with the volume of cars we're already buying through this new direct sourcing channel. In Q3, we purchased 6,761 vehicles directly from consumers, up 552% year-on-year, diversifying our selection and improving our inventory acquisition costs. Within just a couple of months since our July launch, we've already seen the proportion of retail units sold that we source directly from customers rise to 10%, up from 2% this time last year and 6% in Q2. Whilst the wider industry is experiencing supply constraints, we've seen limited issues in this area to date and have become less reliant on external sources of supply following the launch of our direct car buying channel, which we expect to provide a significant volume of vehicles in the future. We're confident that this new direct sourcing proposition will significantly change our buying mix over time and help to further improve our future margins. Our plans for expansion into France and Germany by year-end remain firmly on track, and we continue to grow our teams and develop our operations and infrastructure in both markets. Entry into mainland Europe will drastically expand our addressable market and is a significant growth opportunity for us over the coming years. Our end-to-end testing is going well, and we could not be more excited about the future growth prospects across Europe. During the period, we also acquired Kazana, one of the leading data insights platforms in the European automotive space, and which owns one of the most comprehensive vehicle pricing data sets globally. This deal has enhanced our data team capabilities and will enable us to further optimize our buying and pricing of vehicles across the UK and Europe. Our strong performance this quarter is further proof of our compelling business model and the significant opportunity to grow our business. We have tremendous opportunities to continue to grow our share in this huge and highly fragmented market. Now turning to the key drivers of our future growth and profitability. As a reminder, we plan to leverage our highly efficient business model in the following ways. First, by growing our revenues. We expect the growth in revenues to be driven by an increase in market penetration in share led by the shift to online buying and supported by the material growth in our in-house reconditioning capabilities. Also, through increased TAM with our European expansion and expansion of our product offering and with the launch of further ancillary products and higher attachment rates driving lifetime value. Second, by increasing our GPU. We expect the growth in our GPU to be driven by a continued shift in our buying mix, including further success in the sourcing of cars directly from consumers, also through continued efficiencies in our reconditioning, logistics, and stock turn with scale, and further enhancements to our products, partnerships, and processes. Third, by reducing our CAC. We expect the reduction in CAC to be driven by the growth in adoption of online car buying, growing substantially from less than 2% today. Also through improved conversion rates over time, which will occur naturally as we grow our inventory. And with a higher proportion of direct traffic as a result of our brand investment, SEO, and repeat users. I'd like to take this opportunity to thank our amazing team that is now over 3,500 strong across the UK and Europe and who put the consumers first in everything we do. Whilst we're incredibly proud of these Q3 results, we are still in the very early stages of transforming the car buying and selling experience across Europe and look forward to continuing our mission to delivering the best selection, quality, transparency, and convenience to our customers. Now I'll turn the call over to Stephen to review our quarter financial performance and the outlook for the remainder of the year in greater detail.
spk06: Thank you, Alex, and good morning, everyone. During the quarter, our revenues increased 267% to 174.4 million pounds sterling, up from 47.5 million in Q3 2020. Our strong Q3 performance was the result of another record quarter of vehicle sales, increasing over 200% year-on-year to 13,074, with the associated improvement in ancillary revenues driven from retail sales. Wholesale revenues have seen rapid growth as a byproduct of the significant success of our buying cars directly from the consumer. As a reminder, at this stage, we only sell cars on our website that are zero to six years old, with only 60,000 miles or less on the clock. And any car that doesn't fit this criteria is sold via the wholesale channel. We will look to expand this over time, but for now are happy with this position. Our strong growth came despite suboptimal levels of inventory on our website as a consequence of our decision to bring the reconditioning process fully in-house in the UK ahead of schedule. Less inventory means a lower conversion rate. As Alex has said, this was absolutely the right decision to make, and retail sales have remained strong despite this inventory challenge. We're now starting to see a small improvement in vehicles available on our website, up over 10% from the lowest point in July, but it still remains below the optimum level. Retail GPU increased to positive £801 from a loss per unit of £202 in Q3 last year. We continue to improve all areas of the buying refurbishment and selling process. We expect to see this combined with continued operational improvements, driving GPU forward over the coming periods. Our gross profit was 11.8 million, a 6.8% margin. This compares to a gross loss of 0.7 million or a negative 1.5% margin in the third quarter last year. We completed two acquisitions in the quarter. Kazana for £25 million and SMH for £70 million, with both transactions funded by cash. Our cash position remains strong, having raised proceeds of approximately $836 million net of fees during the SPAC process. Looking forward to the remainder of the year, we continue to see very strong demand from customers for both buying and selling cars. We expect retail units sold to be linked closely to the number of vehicles available for sale on our website, which we expect to continue to grow during Q4 as we make further progress with our reconditioning efforts. We forecast 2021 revenues of over 650 million pounds, excluding the 15 to 20 million of sales where we sell vehicles as an agent for third parties. This 650 million would imply Q4 growth of over 25% quarter on quarter, and over 200% year-on-year. Thank you all very much for listening. I'll now hand you back over to the operator, and we'll commence Q&A.
spk05: And at this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment, please, while we poll for questions. Our first question is from Catherine O'Neil with Citi. Please proceed with your question.
spk01: Oh, hi. Thank you. I've got three or four questions, actually. Firstly, I just wanted to see if you could provide a bit more detail on the refurbishment transition and to what degree that dampened your retail units. I think you mentioned it starting to ease with more units on the site now. And whether looking into 2022, the plan for sort of 128,000 retail units is reasonable based on your sort of accelerated refurbishment in-house. Secondly, on the revenue guidance for the year, I just wanted you to provide a bit more colour on the mix between those three divisions. I guess in particular, the wholesale mix on units looks a bit higher, which I guess is due to the uptake of the consumer selling. Could you maybe talk about how you think about consumer sourcing and that 30%? I think you targeted sort of medium to long term from consumers, but maybe that's coming to me more quickly. And then finally on GPU, how much of the GPU uplift you're seeing is from the dynamics in the car market, I guess, where actually these assets are appreciating? And how much of the GPU expansion do you think we could see brought forward if the consumer sourcing increases more rapidly?
spk08: Thank you. Okay, I'll take those in turn. So first of all, on reconditioning and the transition from outsource to bring this in-house, as we said, strategically, it's absolutely the right thing. things to do, both from a control of quality and improvement of margin and controlling the whole process and improving GPUs. So if you think about the last 12 months, a year ago today, we had two reconditioning sites in the UK, one which we own, the relatively small one, and one in partnership with a third party. Where we are today is that we have 11 sites in the UK that we own. So we've made massive strategic strides over the last 12 months. If you think about those sites we acquired, those were businesses operating conditioning for third parties that were at full capacity. And so we have not been able yet to take over all of that capacity for third So the next 12 months, whilst the last 12 months have been focused on strategically solving for bringing reconditioning in-house long-term, and we have long-term now capability for two or three years, we need to now work on the operational issues of increasing number of people on those sites, changing the shift patterns, reducing the number of partners. So if I think about where we will be 12 months from today, those sites will be fully operating exclusively for Kazoo. They will be operating largely 24-7 instead of five shifts. They're process improvements. So there is a lot to come in terms of improvement. In terms of the question about how much did reconditioning capacity and available cars on the website impact retail sales? I would say the answer to that is significantly because what we see is that we don't have a demand challenge in this business at all. If we are able to buy cars, recondition them, and price them sensibly, we appear to have very little difficulty in selling them. People love our proposition. So as we progress through the remainder of this year and the first part of 2022, we are comfortable that we can meet those targets and we'll have the capacity as we put those operational changes into place. In terms of the second question on the split of revenue and guidance, there are three key areas for the business, as you know, retail, wholesale, and other revenues, which include a variety of things, our ancillary revenues, subscription revenues, et cetera. We see the mix being largely in line with guidance, probably in the early part of next year as a result of the very strong success of our car buying channel, which is going much better than we expected, has two impacts on the business. One is, and they're both related to this question, one is in terms of the wholesale mix is likely to be slightly higher whilst our retail inventory is lower than we anticipated. So we'll have a slightly higher mix of wholesale, I imagine, in Q4 and into the early part of 2022 as we're buying far more cars from consumers than we'd anticipated. And obviously, those that we don't have the capacity to recondition, we will wholesale. And the other impact of that, of course, is the question you asked about the buying mix and how it changes the buying mix at a long-term target of 30% of cars that we sell being sourced directly from consumers. We see significantly beating that target and getting to the 30% much quicker than we originally anticipated and long term getting well beyond that to 50% plus based on the success that we've had since we launched that in July of this year. In terms of GPU and the market dynamics and its impact, I think it's relatively muted actually because What you've seen in the market with increased demand has been an increase in both the sales price, what consumers are paying, but also significantly more demand and price inflation in the wholesale markets, what we're paying for cars. So those two things have largely moved up in tandem. And if I sort of loop that back to the answer to the first question, Why was it strategically important to move reconditioning in-house? I think you see that answer in the GPU, which is if you look at where our GPU was 12 months ago versus where it is today, a lot of that has to do with now doing the reconditioning ourselves as well as improving ancillary product sales, etc. So there's been a trade-off between the benefits of quality and margin of taking reconditioning in-house with a slight trade-off short-term in volume. But of course, long-term, we will get an asset of both greater volume and greater margin. And that's exactly what we're aiming for. I hope that covers all of those questions.
spk01: Yeah, that's very clear. Thanks.
spk04: okay if there are no more questions on Catherine our next question is from Jamie bass with Bamberg please proceed with your question yeah hello everyone just two from me please one is on the sort of wider market so in terms of the correlation between new car sales and secondhand inventory so how do you sort of quantify the correlation so say when we see a pickup in new car sales, how much do you think that translates to secondhand inventory entering the market and what's the lag on that? The second question you've sort of kind of addressed already, but given everything you've been saying about the constraints and reconditioning, is it safe to expect that in the near term we'll be seeing more M&As similar to SMH? Thank you.
spk08: Thanks, Jamie. The market dynamics between new and used cars, there are really two correlations. One, which is a pretty new phenomenon and hasn't really been seen before, and that is what happens in a world where people who wanted a car and wanted a new car but were unable to get it because of the shortage or the lead time from order to delivery, which is much higher now than it has been historically. So what that's done is for people who need a car and don't want to wait, it's driven them into the used car market, whereas they would have otherwise been in the new car market. In terms of the longer-term impact, if you look at the average age of a car that we sell, it's about three to four years old. today will have in the new car market is likely to show up as a shortage in the used car market in two, three, four years time. I actually think that that's unlikely to happen and what you will see is an undersupply of new cars this year and an oversupply next year. So it's a relatively short term thing that gets reversed pretty quickly. In terms of M&A, you know, we look at M&A where it can help improve our infrastructure. So as an example, where we've done deals like SMH or our customer center estate, or we can enhance our team or product proposition or expand geographically. So We continue to grow very strongly organically, but where there are opportunities to accelerate that growth or to improve the team, the product, the infrastructure, any of the moats that we talked about that we're building around the business, if there is an opportunity to do that via M&A and we can buy those businesses sensibly, and they will help to accelerate, then we'll consider those things, both in the UK and in mainland Europe. And obviously, pushing into additional markets in Europe is a key focus. I think, as you know, we are looking to launch in France and Germany before the end of this year. And I expect that we will be in more markets in mainland Europe by the end of next year than we originally anticipated. I hope that answers the questions.
spk04: That's very clear. Thank you.
spk05: And our next question is from Rajat Gupta with JPMorgan. Please proceed with your question.
spk03: Hi, good morning. Thanks for taking my questions and congrats on getting the first quarter out of the way. So just inside the question on reconditioning capabilities, you know, given like you're now transitioning into more in-house reconditioning, do you see an opportunity to widen the inventory spectrum that you're targeting and just catering to, you know, relatively higher margin all your vehicles? Just curious as to the pathway there. And I had a couple of follow-ups as well. Thank you.
spk08: Yeah, good morning. Yes, look, now that we have... transition to a hundred percent in-house it gives us more control over the process and it allows us to extend what's been a very tightly defined inventory set and particularly since we are acquiring so many cars now directly from consumers it allows us when we when we look at the inbound inventory you know historically we were going out and targeting very specific inventory from third-party sellers. But now we're buying everything that a consumer wants to sell to us at the price that we set. That is naturally giving us inventory that historically we wouldn't have gone out and bought. So higher mileage, older age. And I would say our first priority is to optimize all of these operational areas around our in vehicle preparation centers. So improve the process flows, improve the number of shifts we run. There are a number of steps that we have to make, but absolutely in the long term, by controlling the whole process, that allows us to be much more flexible in terms of the inventory set that we hold. And I think that will be the net result is that we will widen that selection.
spk03: Got it. Got it. That's great color. And then any incremental color you could give us on the RAN 365 acquisition, just any broad color on the market opportunity there, what the unit economics look like versus the light vehicle business, just Any further thoughts on that front might be helpful. Thanks.
spk08: Yes, so vans are really an incredibly natural product extension. I sort of describe them as just different makes or models of cars. They're slightly bigger cars. They are the same in every other way. So it's a very, very natural thing for us to do. It increases our addressable market. In the UK alone, there are a million of these light commercial vehicles, so vans sold annually. And what we know is that our consumers are the same consumers who are looking for these vehicles, and the ways of marketing them are exactly the same via aggregators and So there is no additional customer acquisition cost for us. The benefit of actually increasing total available vehicles on our website because it now expands the offering and driving up our conversion rate because the same customers who are looking to come and sell or buy vehicles from us are the same. So that acquisition has provided us with expertise in that space because there are a number of nuances. It also expands you into business customers. So payment and opportunities there. So we've acquired a great team who are specialists in that area. We've also obviously will benefit from acquiring additional inventory, which is owned by that business. So we expect to integrate those by launch vans on the end.
spk03: Got it. Great. This is one last question, you know, more often like a broader macro question. You mentioned in one of the earlier responses, which was interesting around the potential oversupply of new vehicles next year. Just curious as to why do you think that might be happening, particularly given we're hearing more and more about some more supply chain bottlenecks in the auto industry, you know, Obviously semiconductors has been an issue, but you're also hearing more around aluminum. So just curious, I thought that was like an interesting comment. So just curious as to why you think that might happen.
spk08: Well, new cars have always been a product that one has ordered with a delivery time at some point in the future. So what is happening is that there's backed up demand. So people are still placing orders in, 2021 for cars that they would have historically expected to land in 21, but are being now told by the OEMs that those cars will land three, six, nine months later than originally anticipated. So you still have plenty of demand for new cars. What happens is that the delivery is all getting backed up into, you know, 22, and some of it may even get backed up into, into 23. I have my own experience of looking for a new car where I was told that it might take 12 to 18 months for delivery, partly because of a new model and partly because of the chip shortage. But it doesn't necessarily turn everybody away. People are prepared to accept that, okay, I will get that vehicle later. So I think you have a significant sort of excess demand that gets fulfilled in Q2, Q3, Q4. Got it.
spk03: Thank you. Good luck.
spk05: And as a reminder, if anyone has any questions, you may press star 1 on your telephone keypad, doing so will ensure your spot in the question and answer queue. Again, if anyone has any questions, you may press star 1 on your telephone keypad. And our next question is from David Reynolds, but David, please proceed with your question.
spk02: Good morning, good afternoon, Alex, Steve, and Rob. Thank you for that. If nobody has said this already, I think... given the post-covid backdrop um that's a stunning performance in q3 so well done all um if i may i wonder if you could indulge me please with uh four questions um first i think you announced smh um on the 15th of september i wonder if you could perhaps um expand on that a little bit and uh perhaps let us know when you would expect that to have a direct impact on your business. Secondly, in terms of the European expansion, as analysts are simple folks, so I was wondering if you could perhaps give a sense as to when Kazoo will be executing in anger in both France and Germany. Thirdly, just with regard to the direct impact from consumer buying proposition that has clearly been extraordinarily successful across q3 perhaps you could explain why why you think it has done so so well and then lastly just to cover off other income and the ancillary opportunity havana are obviously um executing their finance model very very well i was wondering if if perhaps you could um update us with any thoughts on when you would go into a finance proposition to assist business growth.
spk08: Morning, Dave. Thank you. Plenty of questions there. So first of all, just to comment on what you said. Look, Q3 definitely wasn't without its challenges. You mentioned COVID. It actually, Q3, probably COVID had the biggest impact on our business since the beginning of the pandemic in terms of seeing staff shortages, people off sick, supply chain shortages, driver shortages. And of course, in the back end of Q3, we had to endure fuel shortages as well in the UK, which for a business that is often off a tank of free fuel with every car itself and delivering those cars, fuel shortages weren't the most helpful thing. So despite all of those headwinds of Q3, yes, we had a great quarter. In terms of the specific questions, SMH, you're right, mid-September is when we completed our acquisition. And, you know, as I said earlier, we acquired a business that had six sites but 100% capacity in servicing third-party contracts. So there is a process to go through of serving notice, terminating those contracts, and repurposing those sites in terms of flow and people and shift patterns to optimize for what our needs are. And that is all happening incrementally. There's sort of no step change in that. It's all happening a little bit every month. And the combination of all of those factors gets us to a place throughout the course of the idea where 100% of our 11 sites are focused entirely on our production, our standards, working in a much, much more efficient way. And we see the ability to triple production from where it was in 2017. for example, September 21 in September 22 with our existing sites that we now have. But that will be a gradual monthly improvement as we put in new processes, add people, add shifts, and remove partners. In terms of EU expansion, we have been pretty conservative, I think, in terms of our modeling for the EU for next year. It looks a little bit like UK was in our first year, which was 2020. We will launch before the end of this year. We're doing full end-to-end testing in both markets currently. It's going incredibly well. And next year, we will start to ramp up our marketing. And as I said a little bit earlier on this call, our expectation now is given how well our preparation is going and how strong our team is in the EU, is that we will be in a number of other markets beyond France and Germany in 2022. So I think to some, we've been relatively conservative in our modeling for EU. And you should expect to see us from a marketing perspective very much follow the same pattern that we did in the UK with building a very strong brand very quickly across those markets. In terms of car buying, why has it gone much better than anticipated? I think a couple of reasons. One, we've got a very unique proposition. And two, the alternatives are relatively poor. So if you are prepared to buy cars from a consumer, pay them a sensible price. But then if you look at the unique elements of our proposition, We pay people the same day, often within a few minutes. We've integrated a unique payment solution, so they get instant gratification on that. But also, we offer a guaranteed price. We don't chip, providing the consumer hasn't said anything that was untrue about a vehicle or mileage or condition. The price we offer is guaranteed, which is not the norm in the market. There are a number of players who offer one price and then when they have you captive, pay a different price, which we think is a poor consumer experience. And finally, we are the only player in the market offering to come and pick it up from you. So again, the traditional historic experience has been you either part exchange it at a dealership for... when you buy a new car, or you sell it to a player where you have to drop it off and then you're stranded in a, for example, a supermarket car park somewhere where you've dropped it off, or you sell it privately, and again, you're stranded somewhere. And we offer the ability to either drop it off at one of our customer centers or we'll come and collect it for a fee. So I think we have a unique proposition which has really resonated with consumers in terms of the experience, the honesty, the guarantee, etc. And then in terms of ancillary revenues, yes, look, what you've seen with Carvana and others is that actually the opportunity on GPU is is higher than they had originally anticipated. And a lot of this comes from ancillary revenues. We've always said that long-term, we see the split as about 50-50 between the metal and the non-metal. Particularly on finance, we see significant upside. We've done a lot of work thinking about, you know, we have a very good partnership at the moment with Blackhorse and with our platform provider. But at some point, we will take this more in-house. We've started to think about that. And I think the only thing I'm prepared to say on that subject today is that we had not modeled anything in until sort of the end of 2024 to bring that in-house. And I would feel relatively confident saying we expect to do it before then, but I'm not going to put a date on when.
spk02: Thank you.
spk05: And we have reached the end of the question and answer session, and also this concludes today's conference. And you may disconnect your lines at this time. Thank you for your participation.
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