Highlights

  • Net profit after tax fell to NZD 1.01m from NZD 1.67m in HY25.
  • Revenue dropped 5% to NZD 39.8m due to lower vehicle sales volumes.
  • Interim dividend of 2.15 cents per share declared despite market challenges.

2 Cheap Cars Group Limited (NZX:2CC) reported net profit after tax (NPAT) of NZD 1.01 million for the half year ended 30 September 2025 (HY26), a decline from NZD 1.67 million in the same period last year. Revenue fell 5% year-over-year to NZD 39.8 million, driven by reduced sales volumes and challenging economic conditions.

The company’s gross margin decreased to NZD 7.86 million from NZD 9.06 million, reflecting margin pressure from higher regulatory costs. Underlying EBITDA, including finance income, stood at NZD 3.1 million, down from NZD 3.8 million in HY25. Underlying earnings per share also declined to 2.2 cents compared with 3.7 cents previously. Vehicle sales fell 13% to 3,604 units.

Economic and Regulatory Headwinds

The first half of FY26 was marked by continued weakness in the broader economy, subdued consumer confidence, and high compliance costs impacting the used-vehicle sector. The Clean Car Standard added cost pressures, reducing gross margin by two percentage points to 19%. The company attributed a NZD 0.7 million reduction in NPAT to after-tax effects from the carbon tax under the Clean Car Standard.

Despite these challenges, the company maintained a stable balance sheet with NZD 4.6 million in cash, steady debt levels, and managed inventory aligned with current market demand.

Operational and Strategic Developments

To address volatile market conditions, 2 Cheap Cars has adjusted its operations to enhance efficiency and capability. A senior Brand and Marketing Manager is being recruited to strengthen direct-to-consumer channels and improve brand positioning.

The company’s CEO, David Sena, is spending additional time in Japan to reinforce local procurement efforts and improve supply chain consistency. Additionally, the company has adopted a hybrid compliance model, combining in-house and outsourced resources to manage costs and capacity more effectively.

Dividend and Outlook

The Board has declared an interim dividend of 2.15 cents per share (gross), representing 70% of underlying NPAT for the period. The record date is 21 November 2025, with payment scheduled for 5 December 2025.

Share Performance of 2CC

2CC was trading at NZD 0.5750 per share as of 13 November 2025 at the time of writing.