2CC Group Interim results for Half Year 2024

15 November 2023

Market announcement
NZX:2CC

Record half year profit, guidance upgrade and interim dividend declared

2 Cheap Cars Group Limited (NZX:2CC) has today reported a record $3.2m net profit after tax (NPAT)
for the half year to 30 September 2023 (HY24), an increase of $2.6m over HY23.

Summary of key results
(Figures quoted are in NZ dollars. Comparisons are made against HY23)
 Revenue and income: $41.9 m, increased 4%
 Gross margin YTD: $10.1m, up 41%
 Underlying EBITDA including finance income: $5.7m, up $3.0m
 Net profit after tax (NPAT): $3.2m, up $2.6m
 Underlying net profit after tax (NPAT): $3.2m, up $2.2m
 Underlying earnings per share (EPS): 6.9 cents per share (cps) vs 2.3cps
 Vehicle sales: down 12% to 3,776

Strong inventory levels and further insourcing of compliance activity have continued to deliver savings
and led to faster yard stock replenishment, resulting in strong trading across the half and driving
profitable growth.

Revenue of $41.9m is 4% ahead of the HY23 result, reflecting higher prices and stronger finance and
insurance (F&I) penetration rates. This has more than offset lower sales volumes and the impact of
lower revenue from the Company loan book which continues to wind down.

As a result of the Company’s focus on prioritising margin over market share, year-to-date gross margin
of $10.1m was up from $7.2m in the same period in the prior year. YTD gross margin was 24%, up 6%,
reflecting astute vehicle selection in Japan and sharp focus across the full value chain.

Year-to-date operating costs were down slightly at $4.4m, with underlying EBITDA (including finance
income) of $5.7m, up $3m from $2.7m.

Total net operating cash flow improved to $6.2m, up from $4.6m.

The Company has cash of $6.1m, no net debt and total equity of $19.0m.

CEO Paul Millward says the half year result underscores the success of the Company’s transformation
strategy.

“By any measure, this is a terrific result and proof of a dramatic turnaround in less than 12 months. The
Company is now in really great shape. We have a solid vehicle supply, costs continue to be well
contained and our decision to prioritise margin is, literally, paying dividends. Our gross margin
expansion plan is delivering ahead of schedule. This is a very proud achievement for the entire 2 Cheap
Cars team” he said.

Dividend

In accordance with its policy
1
, the Board of Directors is very pleased to declare a HY24 net interim
dividend at 60% of underlying NPAT, which is 5.78 cents per share gross. The record date is 22
November 2023 and the dividend will be paid on 6 December 2023. This represents a gross annualised
dividend yield of approximately 16.2% based on the share price of $0.71, (as at 14 November 2023).

Outlook

Following the strong finish to the half year, and a pleasing October result with continued strong margins,
the Company is increasing FY24 net profit after tax (NPAT) guidance to be above $6.8m, up from
between $5.2m and $5.7m as previously communicated in September.

Chairman Michael Stiassny says the Company is very well placed to maintain its strong performance
in the second half.

“Announcing a record first half profit, delivering a very strong dividend to our patient shareholders, and
once again upgrading our guidance gives us reason to be optimistic about the critical back half of the
year. Successfully returned to its profitable ‘no frills’ roots, 2 Cheap Cars’ performance is exceptional
and the Company is well positioned to not just withstand – but benefit from – the economic headwinds
New Zealand is experiencing,” he said.


The numbers included in this announcement are unaudited.


Ends

This announcement has been authorised by 2CC Chair, Michael Stiassny.

For shareholder enquiries, please contact
Angus Guerin
CFO
Mobile: +64 21 998 708
Email: angus.guerin@2ccgroup.co.nz


About 2 Cheap Cars Group* (2CC)
2 Cheap Cars Group is an integrated used automotive group.  We are vertically integrated from procurement in Japan through
to our retail branches nationwide.  Operating under the “2 Cheap Cars” brand, our Automotive Retail company is one of the
largest used vehicle sellers in New Zealand with 12 dealerships across the country. Our mission is to deliver on our promise...
2 Cheap Cars, driving better deals, every day.

*2 Cheap Cars Group was previously known as NZ Automotive Investments (NZAI).



1
The 2 Cheap Cars Group Limited dividend policy is to target a payout ratio of between 50% and
60% of underlying NPAT.

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2 Cheap Cars Group Limited
Interim financial statements
For the 6 month period ended 30 September 2023

2 Cheap Cars Group Limited
Consolidated statement of changes in equity
For the 6 month period ended 30 September 2023
Share
Capital
Retained
Earnings
Foreign
Currency
Translation
Reserve
Amalgamation
Reserve
Total
attributable to
equity holders
of Parent
Non-
Controlling
Interests
Total Equity/
(Accumulated
Losses)
$'000$'000$'000$'000$'000$'000$'000
Balance as at 1 April 202239,365 11,789 (85) (35,956) 15,113 - 15,113
Profit for the Period- 1,292 - - 1,292 - 1,292
Translation of Foreign Operations- - 77 - 77 - 77
Total Comprehensive Income for the Period- 1,292 77 - 1,369 - 1,369
Share options recognised at fair value net of options lapsed(21) - - (21) - (21)
Dividends paid- (287) - - (287) - (287)
Total transactions with owners of the Group(21) (287) - - (308) - (308)
Balance as at 31 March 202339,344 12,794 (8) (35,956) 16,174 - 16,174
Balance as at 1 April 202339,344 12,794 (8) (35,956) 16,174 - 16,174
Profit for the period- 3,158 - - 3,158 - 3,158
Translation of foreign operations- - (165) - (165) - (165)
Total comprehensive income for the period- 3,158 (165) - 2,993 - 2,993
Share options recognised at fair value net of options lapsed- - - - - - -
Dividends paid- - - - - - -
Total transactions with owners of the Group- - - - - - -
Balance as at 30 September 202339,344 15,952 (173) (35,956) 19,167 - 19,167
The accompanying notes form part of these interim consolidated financial statements
2

2 Cheap Cars Group Limited
Interim consolidated statement of financial position
As at 30 September 2023
UnauditedAudited
SEP 2023MAR 2023
Note$'000$'000
Equity
Share capital39,344 39,344
Amalgamation reserve(35,956) (35,956)
Foreign currency translation reserve(172) (8)
Retained earnings15,952 12,794
Total equity19,167 16,174
Current liabilities
Trade and Other Payables3,307 2,743
Employee Benefit liabilities497 834
Borrowings- 900
Income tax Payable1,024 91
Derivative financial liabilities172 55
Related Party Payable10 10
Lease liability1,614 1,856
Other Current Liabilities53 81
Total current liabilities6,679 6,570
Non-current liabilities
Lease liability5,782 6,078
Total non-current liabilities5,782 6,078
Total equity and liabilities31,627 28,822
Current assets
Cash and cash equivalents6,094 3,767
Lease Guarantee1,500 -
Trade and other receivables863 669
Other current assets1,550 2,871
Income tax receivable- -
Loans receivable41,358 1,767
Inventories10,191 8,377
Total current assets21,556 17,451
Non-current assets
Plant, property and equipment1,420 1,319
Intangible assets5 5
Loans receivable 41,330 2,142
Deferred tax asset491 445
Right-of-use assets 6,826 7,461
Total non-current assets10,071 11,371
Total assets 31,627 28,822
Approved on behalf of the Board on 28th November 2023
DirectorDate
DirectorDate
The accompanying notes form part of these interim consolidated financial statements
3

2 Cheap Cars Group Limited
Consolidated statement of profit or loss and other comprehensive income
For the 6 month period ended 30 September 2023
UnauditedUnaudited
NoteSEP 2023SEP 2022
$'000$'000
Revenue
Revenue and income41,903 40,146
Sundry income0 23
Expenses
Cost of sales(31,593) (32,760)
Administration expenses5(1,473) (1,821)
Advertising expenses(741) (820)
Depreciation expenses(1,135) (1,021)
Employee benefits5(1,848) (2,180)
Finance expenses(391) (477)
Property expenses(335) (326)
Profit before income tax34,386 764
Income tax expense(1,228) (205)
Profit for the period3,158 559
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Translation of foreign operations(165) 36
Total other comprehensive income(165) 36
Total comprehensive income for the period2,993 595
Earnings per share
Basic earnings per share 0.07 0.01
Diluted earnings per share 0.07 0.01
The accompanying notes form part of these interim consolidated financial statements
4

2 Cheap Cars Group Limited
Interim consolidated statement of cash flows
For the 6 month period ended 30 September 2023
UnauditedUnaudited
SEP 2023SEP 2022
$'000$'000
Cash flows from operating activities
Cash receipts from customers
41,643 40,331
Government grants received
- 17
Cash paid to suppliers and employees
(36,773) (35,994)
Loan receivables advanced
- (1,362)
Proceeds from loan receivables
1,143 2,451
Interest received
100 52
Interest paid
(127) (246)
Non-recurring costs
- (461)
Tax paid
256 (157)
Net cash inflow from operating activities6,242 4,631
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
7 87
Purchase of property, plant and equipment
(219) (204)
Net cash outflow from investing activities(212) (117)
Cash flows from financing activities
Dividend paid
- (287)
Repayments from related parties
- -
Advances to related parties
(99) -
Interest paid
(177) (194)
Principal elements of lease payments
(929) (406)
Lease Guarantee
(1,500) -
Cost of capital raise
76 -
Trade finance advance
(910) (1,200)
Net cash outflow from financing activities(3,539) (2,087)
Net increase/(decrease) in cash and cash equivalents
2,491 2,427
Cash and cash equivalents at beginning of period
3,767 3,790
Effect of exchange rate
(165) (63)
Cash and cash equivalents at end of period6,094 6,154
The accompanying notes form part of these interim consolidated financial statements
5

Notes to the financial statements
1. Reporting entity
2. Basis of preparation
(a) Statement of compliance
(b) Basis of measurement
• Derivative financial instruments
• Loans receivable (Note 4)
(c) Functional and presentation currency
(d) Going Concern
(e) Critical accounting estimates and judgements
(f) Changes in accounting policies
There were no accounting policy changes during the period.
TheseinterimconsolidatedfinancialstatementsfortheGrouparepresentedinNewZealanddollars($),whichistheGroup'sfunctional
and the Group's presentation currency. All financial information presented has been rounded to the nearest thousand dollars.
2 Cheap Cars Group Limited (the Company) is a company domiciled in New Zealand.
TheCompanyisincorporatedinNewZealand,registeredundertheCompaniesAct1993andispubliclytradedontheNewZealand
Stock Exchange.
TheseinterimconsolidatedfinancialstatementscomplywiththerequirementsoftheCompaniesAct1993andtheFinancialMarkets
Conduct Act 2013.
These interim consolidated financial statements as at 30 September 2023 comprise the Company and its subsidiaries:
2CheapCarsLimited,NZMotorFinanceLimited,2CCInternationalLimited,2CheapRentalCarsLimited,CarSafetyNZLimitedand
Car Plus K.K. (collectively, the Group).
TheseunauditedinterimconsolidatedfinancialstatementshavebeenpreparedinaccordancewithGenerallyAcceptedAccounting
PracticeinNewZealand(GAAP)andtherequirementsoftheFinancialMarketsConductAct2013.Theyhavebeenpreparedin
accordancewithIAS34'Interimfinancialreporting'.Theydonotincludealloftherequiredinformationinannualfinancialstatementsin
accordance with IFRS and should be read in conjunction with the consolidated financial statements for the year ended 31 March 2023.
Theinterimconsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasisexceptthatcertainassetsandliabilities
are measured at fair value where stated under their specific accounting policies.
The Directors consider that the Group is a going concern and the consolidated financial statements have been prepared on that basis.
Thepreparationoftheconsolidatedfinancialstatements,requiresmanagementtomakejudgements,estimatesandassumptionsthat
affecttheapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses.Actualresultsmay
differ from these estimates.
Estimatesandunderlyingassumptionsarereviewedonanon-goingbasis.Revisionstoaccountingestimatesarerecognisedinthe
period in which the estimates are revised and in any future periods affected.
6

3. Segment reporting
Description of segments
Reportable segments have been identified as follows:
Operating Segments
NZ Motor
2 Cheap CarsFinance
As at 30 September 2023LimitedLimitedOthersTotal
$'000$'000$'000$'000$'000
Revenue including interest41,656 239 3,382 (3,375) 41,903
Sundry Income(4) - 133 (128) 0
Cost of sale(32,514) 1 (2,489) 3,407 (31,593)
Interest expense - finance- (10) - - (10)
Operating expense(3,789) (139) (1,606) (0) (5,533)
Operating profit5,350 92 (580) (96) 4,767
Dividend received- - - - -
Interest expense - trading(289) (77) (6) (9) (382)
Net profit before tax5,060 15 (585) (105) 4,386
NZ Motor
2 Cheap CarsFinance
As at 30 September 2022LimitedLimitedOthersTotal
$'000$'000$'000$'000$'000
Revenue including interest39,714 594 1,057 (1,219) 40,146
Sundry Income20 - 3 - 23
Cost of sale(33,213) - (601) 1,053 (32,760)
Interest expense - finance- (115) - - (115)
Operating expense(4,032) (349) (1,788) 1 (6,168)
Operating profit2,489 130 (1,329) (165) 1,126
Dividend received- - 287 (287) -
Interest expense - trading(307) (241) - 186 (362)
Net profit before tax2,182 (111) (1,042) (266) 764
ManagementhasdeterminedtheoperatingsegmentsbasedonthecomponentsoftheGroupthatengageinbusinessactivities,which
havediscretefinancialinformationavailableandwhoseoperatingresultsareregularlyreviewedbytheGroup'schiefoperatingdecision
maker.ThechiefoperatingdecisionmakerhasbeenidentifiedastheBoardofDirectors.TheBoardofDirectorsmakesdecisions
abouthowresourcesareallocatedtothesegmentsandassessestheirperformance.GeographicallytheGroup'sbusinessactivitiesare
located in New Zealand.
Elimination -
Inter-entity
transactions
Elimination -
Inter-entity
transactions
7

4. Loans Receivable
Determination of fair values
Loans and receivables – At amortised cost book valueBook value
Loans and receivables – At fair value through profit and lossDiscounted cash flow
Fair value through
Amortised costprofit and loss Total
Opening balance (1 Apr 2022)
Gross carrying value3,455 3,442 6,897
Less: Impairment allowance (73) - (73)
Total Loans receivable3,382 3,442 6,824
Movements during the period
Advances of loans to customers 622 707 1,329
Repayments of loans by customers(2,292) (2,158) (4,450)
Movement in accrued interest456 - 456
Movement in Impairment Allowance(28) - (28)
Fair value gain/(loss) on revaluation- (222) (222)
Total Movements(1,242) (1,673) (2,915)
Gross carrying value2,241 1,769 4,010
Less: Impairment allowance (101) - (101)
Total Loans receivable2,140 1,769 3,909
Closing balance (31 March 2023)
Current portion1,029 839 1,868
Non-current portion1,212 930 2,142
Less: Impairment allowance (101) - (101)
Total Loans receivable2,140 1,769 3,909
Fair value through
Amortised Costprofit and loss Total
Opening balance (1 Apr 2023)
Gross carrying value2,241 1,769 4,010
Less: Impairment allowance (101) - (101)
Total loans receivable2,140 1,769 3,909
Movements during the period
Advances of loans to customers - - -
Repayments of loans by customers(774) (635) (1,409)
Movement in accrued interest141 - 141
Other accrued repayments9 9 18
Movement in Impairment Allowance(34) - (34)
Fair value gain/(loss) on revaluation- 63
Total movements(658) (563) (1,284)
Gross carrying value1,617 1,207 2,824
Less: Impairment allowance (136) - (136)
Total loans receivable1,482 1,207 2,688
Closing balance (30 Sep 2023)
Current portion794 700 1,495
Non-current portion824 506 1,330
Less: Impairment allowance (136) (136)
Total loans receivable1,482 1,207 2,689
The effective interest rate on Loans receivable at Amortised cost are 9.95% - 17.95%
Loansreceivablemeasuredatamortisedcost(financialassetswhichrepresentsolelypaymentsofprincipalandinterest)havebeen
impaired at 8.8%, using the expected credit loss model.
Loansreceivablemeasuredatfairvalue(financialinstrumentsthatincludewaiverbasedclauses)aremodelledatfairvalueand
include an effective default risk impairment rate of 7.5% which is factored into the valuation inputs.
The Company ceased additional lending in July 2022 with the remaining loan book now being wound down.
8

5. Operating expenses
6. Subsequent events
Prior year operating costs included a significant change in the Board of Directors and Management which resulted in restructuring costs
(including terminal benefits) and other non recuring costs of $654,086 being incurred during the period.
No significant events have occurred subsequent to the balance date.
9

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Results announcement



Results for announcement to the market
Name of issuer 2 Cheap Cars Group Limited
Reporting Period 6 months to 30 September 2023
Previous Reporting Period 6 months to 30 September 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$41,903 4%
Total Revenue $41,903 4%
Net profit/(loss) from
continuing operations
$3,158 465%
Total net profit/(loss) $2,993 403%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.04160000
Imputed amount per Quoted
Equity Security
$0.01617778
Record Date 22/11/2023
Dividend Payment Date 06/12/2023
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.41 $0.33
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to accompanying Results Announcement
Authority for this announcement
Name of person

authorised
to make this announcement
Paul Millward, CEO
Contact person for this
announcement
Angus Guerin, CFO
Contact phone number 021 998 708
Contact email address angus.guerin@2ccgroup.co.nz
Date of release through MAP

15/11/2023

Unaudited financial statements accompany this announcement.

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Template
Distribution Notice

Updated as at June 2023



Please note: all cash amounts in this form should be provided to 8 decimal places, including zeros (ie 0.01001000)

Please do not amend or delete individual rows. As this template relates to prescribed content, changes to content
should only be made where it is clearly indicated that this is permitted, otherwise, if an Issuer considers a particular
element does not apply, mark the row as N/A, Any other changes to this prescribed form must first be approved by
NZX as required under NZX Listing Rule 3.26.1.

Section 1: Issuer information
Name of issuer 2 Cheap Cars Group Limited
Financial product name/description Ordinary Shares
NZX ticker code 2CC
ISIN (If unknown, check on NZX
website)
NZNZAE0001S5
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 22/11//2023
Ex-Date (one business day before the
Record Date)
21/11/2023
Payment date (and allotment date for
DRP)
06/12/2023
Total monies associated with the
distribution
1

$ 1,895,067.20
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency New Zealand Dollar
Section 2: Distribution amounts per financial product
Gross distribution
2
$ 0.05777778
Gross taxable amount
3
$ 0.05777778
Total cash distribution
4
$ 0.04160000
Excluded amount (applicable to listed
PIEs)
$ N/A
Supplementary distribution amount $ 0.00000000


1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.

Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed

Fully imputed


If fully or partially imputed, please
state imputation rate as % applied
6

28%
Imputation tax credits per financial
product
$ 0.01617778
Resident Withholding Tax per
financial product
$ 0.00288889


Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Paul Millward, CEO
Contact person for this
announcement
Angus Guerin, CFO
Contact phone number 021998708
Contact email address Angus.guerin@2ccgroup.co.nz
Date of release through MAP

15/11/2023






5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.



6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.