2 Cheap Cars reports profit drop, blames NZ downturn

2 Cheap Cars has reported a net profit after tax of $3.3 million for the full year to March 31, 2025, a decrease of $2.9m from the previous year.

The company's revenue and income declined by 6% to $82m, while its gross margin decreased by 14% to $17.8m.

Vehicle sales were also down 6%, with 7,675 units sold.

The underlying ebitda, including finance income, dropped 32%.

2 Cheap Cars attributed the challenging market conditions to New Zealand's economic downturn, a sharp fall in immigration, and softer market demand.

Operating expenses increased by 10% year-on-year, primarily due to rising costs of listing fees on third-party platforms.

The company said it is now accelerating investment into owned digital channels and exploring new third-party platforms to reduce long-term customer acquisition costs.

Despite the difficult market, 2 Cheap Cars said it remains well positioned with inventory valued at $14.9m and compliance with all banking covenants.

It declared a final gross dividend of 2.97 cents per share, representing 60% of its net profit after tax.

The company expects trading conditions to improve in the future.