Exhibit 99.1
CAZOO GROUP LTD
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the six months ended June 30, 2023
| Continuing operations | Notes | Six months ended June 30 2023 £’000 | Six
months Restated1 | |||||||
| Revenue2 | 3 | |||||||||
| Cost of sales | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||
| Marketing expenses | ( | ) | ( | ) | ||||||
| Selling and distribution expenses | ( | ) | ( | ) | ||||||
| Administrative expenses | ( | ) | ( | ) | ||||||
| Loss from operations | ( | ) | ( | ) | ||||||
| Finance income | ||||||||||
| Finance expense | ( | ) | ( | ) | ||||||
| Other income and expenses3 | 4 | |||||||||
| Loss before tax | ( | ) | ( | ) | ||||||
| Tax credit | 7 | |||||||||
| Loss for the period from continuing operations | ( | ) | ( | ) | ||||||
| Discontinued operations | ||||||||||
| Profit/(Loss) after tax from discontinued operations | 6 | ( | ) | |||||||
| Loss for the period | ( | ) | ( | ) | ||||||
| Other comprehensive income that may be reclassified to profit or loss in subsequent periods | ||||||||||
| Exchange differences on translation of foreign operations | ( | ) | ||||||||
| Total comprehensive loss for the period | ( | ) | ( | ) | ||||||
| Earnings per share: | ||||||||||
| Basic loss per ordinary share4 | £ | ( | ) | £ | ( | ) | ||||
| Diluted loss per ordinary share4 | £ | ( | ) | £ | ( | ) | ||||
| Earnings per share from continuing operations: | ||||||||||
| Basic loss per ordinary share from continuing operations4 | £ | ( | ) | £ | ( | ) | ||||
| Diluted loss per ordinary share from continuing operations4 | £ | ( | ) | £ | ( | ) | ||||
| 1 | |
| 2 | |
| 3 | |
| 4 |
The notes on pages 7 to 19 form part of these financial statements.
2
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at June 30, 2023
| At June 30 2023 | At December 31 2022 | |||||||||
| Notes | £’000 | £’000 | ||||||||
| Assets | ||||||||||
| Non-current assets | ||||||||||
| Property, plant and equipment | 8 | |||||||||
| Right-of-use assets | 9 | |||||||||
| Intangible assets | 10 | |||||||||
| Trade and other receivables | ||||||||||
| Current assets | ||||||||||
| Inventory | ||||||||||
| Trade and other receivables | ||||||||||
| Cash and cash equivalents | 14 | |||||||||
| Assets held for sale | ||||||||||
| Total assets | ||||||||||
| Liabilities | ||||||||||
| Current liabilities | ||||||||||
| Trade and other payables | ||||||||||
| Loans and borrowings | 11 | |||||||||
| Convertible Notes and embedded derivative | 12 | |||||||||
| Lease liabilities | 9 | |||||||||
| Provisions | 13 | |||||||||
| Liabilities directly associated with the assets held for sale | ||||||||||
| Non-current liabilities | ||||||||||
| Loans and borrowings | 11 | |||||||||
| Convertible Notes and embedded derivative | 12 | |||||||||
| Warrants | 12 | |||||||||
| Lease liabilities | 9 | |||||||||
| Provisions | 13 | |||||||||
| Deferred tax | — | |||||||||
| Total liabilities | ||||||||||
| Net (liabilities)/assets | ( | ) | ||||||||
| Share capital | 15 | |||||||||
| Share premium | ||||||||||
| Merger reserve | ||||||||||
| Retained earnings | ( | ) | ( | ) | ||||||
| Foreign currency translation reserve | ||||||||||
| Total equity | ( | ) | ||||||||
The notes on pages 7 to 19 form part of these financial statements.
3
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended June 30, 2023
| Share capital | Share premium | Merger reserve | Retained earnings | Foreign currency translation reserve | Total equity | |||||||||||||||||||||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||||||||||||||||||||
| At January 1, 2023 | ( | ) | ||||||||||||||||||||||||
| Comprehensive loss for the period | ||||||||||||||||||||||||||
| Loss for the period | ( | ) | ( | ) | ||||||||||||||||||||||
| Other comprehensive income | ( | ) | ( | ) | ||||||||||||||||||||||
| Total comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Contributions by and distributions to owners | ||||||||||||||||||||||||||
| Share-based payments | 15 | |||||||||||||||||||||||||
| Taxation recognized directly in equity | ||||||||||||||||||||||||||
| At June 30, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||
The notes on pages 7 to 19 form part of these financial statements.
4
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended June 30, 2022
| Share capital | Share premium | Merger reserve | Retained earnings | Foreign currency translation reserve | Total equity | |||||||||||||||||||||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||||||||||||||||||||
| At January 1, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||
| Comprehensive loss for the period | ||||||||||||||||||||||||||
| Loss for the period | ( | ) | ( | ) | ||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Total comprehensive loss | ( | ) | ( | ) | ||||||||||||||||||||||
| Contributions by and distributions to owners | ||||||||||||||||||||||||||
| Acquisition of subsidiaries | ||||||||||||||||||||||||||
| Share-based payments | 15 | |||||||||||||||||||||||||
| Taxation recognized directly in equity | ( | ) | ( | ) | ||||||||||||||||||||||
| At June 30, 2022 | ( | ) | ||||||||||||||||||||||||
The notes on pages 7 to 19 form part of these financial statements.
5
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended June 30, 2023
| Notes | Six months ended June 30 2023 £’000 |
Six months ended June 30 2022 £’000 |
||||||||
| Cash flows from operating activities | ||||||||||
| Loss for the period from continuing operations | ( |
) | ( |
) | ||||||
| Gain/(Loss) for the period from discontinued operations | ( |
) | ||||||||
| Adjustments for: | ||||||||||
| Depreciation and impairment of property, plant and equipment and right-of-use assets | ||||||||||
| Amortization and impairment of intangible assets | ||||||||||
| Finance income | ( |
) | ( |
) | ||||||
| Finance expense | ||||||||||
| Share-based payment expense | 15 | |||||||||
| Fair value movement in the Convertible Notes and embedded derivative, fair value movement in the warrants and foreign exchange movements | 4 | ( |
) | ( |
) | |||||
| Tax credit | ( |
) | ||||||||
| Fair value adjustments | ||||||||||
| Loss on disposal of property, plant and equipment | ||||||||||
| Gain on lease terminations | ( |
) | ||||||||
| Loss on sale of discontinued operations | ||||||||||
| (Decrease)/Increase in provisions | ( |
) | ||||||||
| ( |
) | ( |
) | |||||||
| Movements in working capital: | ||||||||||
| Decrease/(Increase) in trade and other receivables | ( |
) | ||||||||
| Decrease/(Increase) in inventory | ( |
) | ||||||||
| Decrease/(Increase) in subscription vehicles | ( |
) | ||||||||
| (Decrease)/Increase in trade and other payables | ( |
) | ||||||||
| Total working capital movements | ( |
) | ||||||||
| Other cash flows from operating activities: | ||||||||||
| Interest received | ||||||||||
| Tax credit received | ||||||||||
| Net cash from/(used in) operating activities | ( |
) | ||||||||
| Cash flows from investing activities: | ||||||||||
| Purchases of property, plant and equipment | 8 | ( |
) | ( |
) | |||||
| Disposals of property, plant and equipment | 8 | |||||||||
| Purchases and development of intangible assets | ( |
) | ( |
) | ||||||
| Acquisition of subsidiaries, net of cash acquired | ( |
) | ||||||||
| Disposal of discontinued operations, net of cash disposed of | 6 | |||||||||
| Proceeds from sale and leasebacks | ||||||||||
| Proceeds from lease modifications | ||||||||||
| Net cash from/(used in) investing activities | ( |
) | ||||||||
| Cash flows from financing activities: | ||||||||||
| Net proceeds from Convertible Notes | ||||||||||
| Proceeds from stocking loans | ||||||||||
| Repayment of stocking loans | ( |
) | ( |
) | ||||||
| Proceeds from subscription facilities | ||||||||||
| Repayment of subscription facilities | ( |
) | ( |
) | ||||||
| Repayment of secured asset financing, bank loans and mortgages | ( |
) | ( |
) | ||||||
| Interest paid on loans and borrowings | ( |
) | ( |
) | ||||||
| Lease payments | ( |
) | ( |
) | ||||||
| Excess proceeds above fair value from sale and leasebacks | ||||||||||
| Net cash (used in)/from financing activities | ( |
) | ||||||||
| Net (decrease)/increase in cash and cash equivalents | ( |
) | ||||||||
| Cash and cash equivalents at the beginning of the period | ||||||||||
| Net foreign exchange difference | ( |
) | ||||||||
| Cash and cash equivalents at the end of the period | 14 | |||||||||
The notes on pages 7 to 19 form part of these financial statements.
6
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended June 30, 2023
1. Reporting entity
Cazoo Group Ltd (the “Company”) is an exempted company incorporated under the laws of the Cayman Islands on March 24, 2021. The Company’s registered office is at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company’s principal executive office is at 41 Chalton Street, London, NW1 1JD, United Kingdom. The Group’s principal activity is the operation of an e-commerce platform for buying and selling used cars.
The unaudited condensed consolidated interim financial statements incorporate the accounts of the Company and entities controlled by the Company (“its subsidiaries”). The term “Group” means Cazoo Group Ltd and its subsidiaries.
2. Basis of preparation
The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023 have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB). The unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the annual consolidated financial statements. Accordingly, this report should be read in conjunction with the Group’s annual report on Form 20-F for the year ended December 31, 2022.
Except as described in Note 2.2. below, the accounting policies adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2022.
7
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
2. Basis of preparation (continued)
2.1 Going concern
The unaudited condensed consolidated interim financial statements have been prepared on a going concern basis.
On January 18, 2023 the Company announced its
revised 2023 plan (the “Revised 2023 Plan”), which aims to improve the unit economics of the business. The Group has implemented
the Revised 2023 Plan during the six months ended June 30, 2023, and in the course of the first half of the year, the Group has closed
certain of its vehicle preparation centers, customer centers, offices and has made significant headcount reductions. In accordance with
the Revised 2023 Plan, the Group has focused on improving unit economics, reducing its fixed cost base and maximizing its cash runway.
This has resulted in a significant improvement in retail gross profit per unit to £
For the going concern assessment, the Group has
prepared a five-year plan which extends the Revised 2023 Plan through to 2027 (the “Five-Year Plan”). The Five-Year Plan includes
actions to increase liquidity such as reduced fixed costs, the sale and leaseback of owned property and a reduction in inventory. The
base case scenario has a forecast cash balance of around £
There are certain inherent uncertainties in forecasting
operating performance, including gross profit margin. In assessing the appropriateness of the going concern assumption, management of
the Group (“Management”) has assessed the probability of achieving the budget and the impact if this is not achieved. To do
so Management developed a severe but plausible downside scenario to the above base case, whereby the most sensitive assumptions have been
flexed. These include limiting average gross profit margin for the whole of the period to
The severe but plausible downside scenario pre mitigations results in a positive cash position but it would be below target minimum liquidity. However, Management has the following actions available to mitigate this: reducing discretionary marketing spend, capital expenditure, headcount, reducing inventory levels further, and raising external finance. While Management is confident that the base case scenario provides adequate liquidity for the Group through to August 31, 2024, the ability of the Group to satisfy its current liabilities and maintain sufficient daily liquidity is dependent on successful execution of that plan, including actions which have not yet been implemented.
Therefore, the severe but plausible downside scenario, which adjusts for certain inherent uncertainties in forecasting operating performance, including gross profit margin and the status of implementing those plans described above, raises substantial doubt about the Group’s ability to continue as a going concern. Management’s plans to mitigate the downside scenario adjustments that raise substantial doubt regarding the Group’s ability to continue as a going concern cannot be guaranteed or are not entirely within the Company’s control and therefore cannot be considered probable.
In addition to the factors set out above, Management also considered
the Group’s debt in the form of its 2.00% Convertible Senior Notes due 2027 (the “Convertible Notes”) which bear regular
interest at a fixed rate of
The accompanying unaudited condensed consolidated interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business and the Group maintaining a listing on the NYSE. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
8
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
2. Basis of preparation (continued)
2.2 New standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2022, except for the adoption of new standards effective as of January 1, 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
The Group has adopted International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12 upon their release on May 23, 2023 which is effective immediately, and will be required for the year ending December 31, 2023. The amendments provide a temporary mandatory exception from accounting for deferred tax in relation to the top-up tax and the deferred tax disclosures.
Several amendments apply for the first time in 2023, but do not have an impact on the unaudited condensed consolidated interim financial statements of the Group:
| ● | IFRS 17 Insurance Contracts |
| ● | Definition of Accounting Estimates - Amendments to IAS 8 |
| ● | Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 |
| ● | Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 |
9
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
3. Revenue
3.1 Disaggregated revenue information
| Six months ended June 30 2023 £’000 | Six months ended June 30 2022 £’000 | |||||||
| Type of goods or services | ||||||||
| Retail1 | ||||||||
| Wholesale | ||||||||
| Other sales1 | ||||||||
| Timing of revenue recognition | ||||||||
| Goods and services transferred at a point in time | ||||||||
| Goods and services transferred over time | ||||||||
| 1 |
3.2 Contract balances
| At June 30, 2023 £’000 | At December 31, 2022 £’000 | |||||||
| Undelivered vehicles and service plans | ||||||||
10
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
4.
| Six months ended June 30 2023 £’000 | Six months ended June 30 2022 £’000 | |||||||
| Fair value movement in the Convertible Notes and embedded derivative | ( | ) | ||||||
| Fair value movement in the warrants | ||||||||
| Foreign exchange movements | ( | ) | ||||||
5. Segment information
Revenue recognized from continuing operations has arisen entirely within the UK (six months ended June 30, 2022: all UK).
| At June 30 2023 £’000 | At December 31 2022 £’000 | |||||||
| Non-current assets | ||||||||
| UK | ||||||||
| EU | ||||||||
| Total | ||||||||
11
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
6. Discontinued operations and disposals
At December 31, 2022, the EU segment was classified
as a discontinued operation following the decision to winddown our operations in mainland Europe. The German subscription business, Cluno
GmbH, was previously classified as a disposal group held for sale. On May 15, 2023, the Group completed the sale of Cluno GmbH for £
|
Six months ended June 30 2023 |
Six months ended |
|||||||
| Revenue | ||||||||
| Expenses | ( |
) | ( |
) | ||||
| Profit/(Loss) from operations | ( |
) | ||||||
| Finance expense | ( |
) | ( |
) | ||||
| Loss on sale of discontinued operations | ( |
) | ||||||
| Profit/(Loss) before tax from discontinued operations | ( |
) | ||||||
| Tax credit | ||||||||
| Profit/(Loss) for the year from discontinued operations | ( |
) | ||||||
| Earnings per share: | ||||||||
| Basic loss per ordinary share from discontinued operations | £ | £ | ( |
) | ||||
| Diluted loss per ordinary share from discontinued operations | £ | £ | ( |
) | ||||
| Net cash flows from/(used in) discontinued operations: | ||||||||
| Operating | ( |
) | ( |
) | ||||
| Investing | ( |
) | ||||||
| Financing | ( |
) | ||||||
| Net cash inflow/(outflow) | ( |
) | ||||||
As Cluno GmbH was sold prior to June 30, 2023, the assets and liabilities previously classified as held for sale are no longer included in the statement of financial position.
| £’000 | ||||
| Assets held for sale | ||||
| Liabilities associated with assets held for sale | ( |
) | ||
| Net assets and liabilities disposed of | ||||
| Consideration received, satisfied in cash | ||||
| Cash and cash equivalents disposed of | ( |
) | ||
| Net cash inflow | ||||
The table above shows the impact of the disposal of Cluno GmbH on the financial position of the Group.
On February 22, 2023, the Group also sold its
third-party data platform, UK Vehicle Limited (“Cazana”), resulting in a gain on sale of £
The total net cash inflow arising from both the disposal of Cluno GmbH
and Cazana was £
12
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
7. Taxation
| Six months ended June 30 2023 £’000 | Six months ended June 30 2022 £’000 | |||||||
| Current income tax expense | ||||||||
| Deferred income tax credit relating to origination and reversal of temporary differences | ||||||||
| Income tax credit recognized in statement of profit or loss | ||||||||
8. Property, plant and equipment
During
the six months ended June 30, 2023, property, plant and equipment decreased by £
In addition, during the six months ended June
30, 2023, the Group acquired property, plant and equipment with a cost of £
The remainder of the movement in property plant
and equipment relates to depreciation of £
9. Right-of-use assets and lease liabilities
During the six months ended June 30, 2023, right-of-use
assets has decreased by £
The loss recognized on termination of the leases
in continuing operations for the six month period to June 30, 2023 was £
The remainder of the movement in right-of-use assets relates to depreciation
of £
10. Intangible assets
The Group performs its annual impairment test in December and when circumstances indicate that the carrying value may be impaired. The UK cash-generating unit (“CGU”) does not have any goodwill following the impairment loss recognized in the year ended December 31, 2022. During the six months ended June 30, 2023, there have been no reversals of the impairment loss previously recognized for intangible assets. At June 30, 2023, the UK CGU was not tested for impairment because there were no indicators of impairment.
13
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
11. Loans and borrowings
| At June 30 2023 £’000 | At December 31 2022 £’000 | |||||||
| Current | ||||||||
| Stocking loans | ||||||||
| Subscription facilities | ||||||||
| Secured asset financing | ||||||||
| Bank loans | ||||||||
| Non-current | ||||||||
| Secured asset financing | ||||||||
| Total loans and borrowings | ||||||||
14
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
12. Financial instruments
12.1 Financial assets
| At June 30 2023 £’000 |
At December 31 2022 £’000 |
|||||||
| Financial assets at amortized cost | ||||||||
| Trade receivables | ||||||||
| Contract assets | ||||||||
| Lease deposits | ||||||||
| Current | ||||||||
| Non-current | ||||||||
12.2 Financial liabilities
Set out below is an overview of financial liabilities held by the Group as at June 30, 2023 and December 31, 2022:
Financial liabilities:
| At June 30 2023 |
At December 31 2022 |
|||||||||||
| Interest rate % | Maturity | £’000 | £’000 | |||||||||
| Current | ||||||||||||
| Convertible Notes | ||||||||||||
| Stocking loans | Base rate + |
|||||||||||
| Subscription facilities | Base rate + |
|||||||||||
| Secured asset financing | ||||||||||||
| Bank loans | ||||||||||||
| Lease liabilities | ||||||||||||
| Non-current | ||||||||||||
| Convertible Notes | ||||||||||||
| Secured asset financing | ||||||||||||
| Lease liabilities | ||||||||||||
15
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
12. Financial instruments (continued)
12.2 Financial liabilities (continued)
| At June 30 2023 | At 2022 | |||||||
| £’000 | £’000 | |||||||
| Financial liabilities at fair value through profit or loss | ||||||||
| Warrants | ||||||||
| Embedded derivative | ||||||||
| Current | ||||||||
| Non-current | ||||||||
12.3 Fair value
Management assessed that the fair value of trade receivables, other receivables, stocking loans, subscription facilities, secured asset financing and trade and other payables approximate their carrying value due to the short-term maturities of these instruments.
The fair value of trade receivables, other receivables, stocking loans, subscription facilities, secured asset financing and trade and other payables has been measured using Level 3 valuation inputs.
Warrants are classified as Level 3 due to the use of unobservable inputs. The fair value is determined using a Black-Scholes model.
The public warrants are classified as Level 3
due to the use of unobservable inputs. The fair value is determined using a Binomial Lattice model. The public warrants were previously
classified as Level 1 as at December 31, 2022 with a fair value of £
The embedded derivative of the Convertible Notes is classified as Level 3 due to the use of unobservable inputs. The fair value is determined using a Monte-Carlo simulation to model the conversion, redemption and repayment premium features.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| At June 30, 2023 | £’000 | £’000 | £’000 | £’000 | ||||||||||||
| Warrants | ||||||||||||||||
| Embedded derivative | ||||||||||||||||
16
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
12. Financial instruments (continued)
12.3 Fair value (continued)
| Warrants | Embedded derivative | |||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
| Dividend yield | ||||||||
| Risk free interest rate | % | % | ||||||
Reconciliation of fair values
| Warrants | Embedded derivative | Total | ||||||||||
| £’000 | £’000 | £’000 | ||||||||||
| At January 1, 2023 | ||||||||||||
| Fair value movement | ( | ) | ( | ) | ||||||||
| Foreign exchange movements | ( | ) | ( | ) | ( | ) | ||||||
| At June 30, 2023 | ||||||||||||
The fair value decrease and foreign exchange movements is recognized in the statement of profit or loss within other income and expenses.
Sensitivity analysis
For
the warrants, a 100 basis point increase in the expected volatility rate would increase the fair value by £
For the embedded derivative, a 100 basis point
increase in the credit spread would decrease the fair value by £
17
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
13.
| Dilapidation | Restructuring | Other | Total | |||||||||||||
| £’000 | £’000 | £’000 | £’000 | |||||||||||||
| At January 1, 2023 | ||||||||||||||||
| Recognized during the period | ||||||||||||||||
| Utilized during the period | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Reversed during the period | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| FX revaluation | ( |
) | ( |
) | ||||||||||||
| At June 30, 2023 | ||||||||||||||||
| Current | ||||||||||||||||
| Non-current | ||||||||||||||||
The dilapidation provisions relate to the expected
reinstatement costs of leased office buildings, vehicle preparation centers, customer centers and vehicles back to the conditions required
by the lease. Cash outflows associated with the dilapidation provisions are to be incurred at the end of the relevant lease term, between
The restructuring provision relates to actions being undertaken as part of the Business Realignment Plan announced on June 7, 2022, the winddown of operations in Europe announced in September 2022 and the Revised 2023 Plan (together the “Revised Business Plans”). Cash outflows associated with the restructuring provision are to be incurred within 12 months.
The decrease in the restructuring provision relates to redundancy payments and sponsorship payments made by the group during the six months ended June 30, 2023 and the reversals of amounts no longer required primarily due to better than expected exit terms being negotiated for sponsorships and other contracts.
14.
| At
June 30 2023 | At December 31 2022 | |||||||
| £’000 | £’000 | |||||||
| Cash at bank available on demand | ||||||||
| Cash held in short-term deposit accounts | ||||||||
| Cash and cash equivalents in the statement of financial position | ||||||||
| Cash at bank and short-term deposits within assets held for sale | ||||||||
| Cash and cash equivalents in the statement of cash flows | ||||||||
15. Equity and Share-based payments
Share capital
On February 7, 2023, the Group announced the consolidation
of the Company’s issued and unissued share capital, par value $
As a result of the reverse stock split, the number
of Class A Shares issuable upon exercise of the Company’s (i) private warrants and (ii) public warrants was reduced at a ratio of
1-for-20, so that each warrant entitles a holder to purchase one twentieth (1/20th) of a Class A Share. The exercise price of each warrant
was increased to $
18
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)
For the six months ended June 30, 2023
15. Equity and Share-based payments (continued)
In addition, as a result of the reverse stock
split, the number of Class A Shares issuable upon conversion of the Convertible Notes was reduced at a ratio of 1-for-20. Pursuant to
and in accordance with the terms of the Indenture governing the Convertible Notes, the conversion rate of the Convertible Notes was reduced
from
As at June 30, 2023, Cazoo had
Share-based payments charge
For the six months ended June 30, 2023, the Group
recognized a net share-based payment charge of £
| £’000 | ||||
| At January 1, 2023 | ||||
| Adjustment to forfeiture rate | ( | ) | ||
| Share based payment charge – Incentive Equity Plan | ||||
| Share based payment charge – SAYE scheme | ||||
| Shares cancelled by forfeiture | ( | ) | ||
| At June 30, 2023 | ||||
| Scheme | Number | Grant date | Expiry date | |||||
| Incentive Equity Plan | ||||||||
| Incentive Equity Plan – Executive Directors | ||||||||
| Incentive Equity Plan | ||||||||
Employee share option fair value assessment
| Incentive Equity Plan1 | Incentive Equity Plan – Executive Directors | |||||||
| Exercise price | £ | £ | ||||||
| Expected volatility | % | |||||||
| Dividend yield | ||||||||
| Risk free interest rate | % | |||||||
| Fair value per share1 | £ | £ | ||||||
| 1 |
The number of options outstanding as at June 30,
2023 was
As a result of the reverse 1-for-20 stock split, the fair value of share options has been multiplied by a factor of 20. By making these adjustments, the fair value of the employees share options is maintained following the share split.
16. Events after the reporting date
In July 2023, the Group completed the sale of
two of its vacated, freehold properties for proceeds of £
With effect from August 10, 2023 the Group reduced
its stocking facilities from £
17. Related party transactions
No reportable related party transactions occurred during the six months ended June 30, 2023 or 2022 other than the remuneration of key management personnel.
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