Mexico City and Melbourne – 11st October 2017: LatAm Autos Limited (ASX: LAA) is pleased to announce its quarterly cash flow statement for the period ending 30 September 2017.
Visible path to cash flow breakeven during second half of calendar year 2018:
- Underlying Group cash receipts +50% since December quarter 2016
- Significant improvement in Group operating cash flows, with September quarter 2017 net monthly cash outflows2 of A$0.7m (46% improvement vs pcp)
- Strong cash position of A$5.4m at 30 September 2017, all proceeds from convertible note received
Strong online organic traffic growth, benefitting from network effects of leading market shares in core markets and strategic partnerships
- Record organic online traffic3 growth in the 12 months to 30 September 2017 of +107% (Mexico), 64% (Ecuador) and 31% (Peru)
- Strategic partnership with ANCA4 driving new online traffic and dealer subscriptions
Restructure successfully completed
- Focus on growing core markets of Mexico and Ecuador. Peru and Panama currently cash break-even, being managed to maximise cashflow whilst retaining long-term growth optionality
- Structural reduction in cost base (sales, marketing and administration costs) is supported by strong online organic traffic growth (benefitting from previous sales & marketing expenditure)
- Mexico is expected to be LAA’s key growth driver. Depth product sales volumes growth expected to continue, despite interruptions from earthquake in September
- S4.8 million used car sales p.a. in Mexico, MotorCredit used car finance a huge opportunity
- Combined depth product unit sales with compound monthly growth of 32%
Strong momentum in September quarter 2017 performance
LAA experienced strong momentum in the September quarter 2017 driven by the impact of the restructure; strong organic online traffic flows; and strong sales momentum in high margin, depth products. The Company delivered strong cashflow results for the September 2017 quarter.