Cazoo Group Ltd (CZOO) on Q3 2021 Results - Earnings Call Transcript
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Operator: 00:03 Greetings. Welcome to the Cazoo Group 3Q Twenty One Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. I will now turn the conference over to your host. Robert Berg, Director of IR and Corporate Finance. You may begin.
Robert Berg: 00:30 Good morning, everyone. Thank you for joining the the Cazoo Q3 earnings call and webcast, which we have just released and can be found on Cazoo’s Investor Relations website at investors.cazoo.co.uk. We appreciate everyone joining us today. With me on the call is Alex Chesterman Founder and Chief Executive Officer and Stephen Morana, Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor Language, which I'm sure you're all familiar with, management may make forward-looking statements, including guidance and underlying assumptions, Forward looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For further discussion of risks related to our business see the filings of Cazoo Group limited with the SEC. 01:22 Now, I would like to turn the call over to Alex. Who'll be followed by Stephen, and then there'll will be a Q&A session at the end.
Alex Chesterman OBE: 01:30 Thanks, Rob. Good morning and thank you to everyone for joining us today. We're delighted to be hosting our first earnings call as a publicly listed business on the NYSE. And we're excited to be sharing our record financial results for Q3. This has been a landmark quarter for our company, not only that we successfully enter the public markets in August, raising proceeds of approximately eight thirty-six million dollars net of fees to further accelerate our growth, but we also sent many records across our key financial metrics as well as making significant progress towards our long-term strategic ambitions. It's becoming very clear that our market leading brand and fully digital world class proposition is resonating strongly with consumers and that the shift to online car buying and selling is accelerating. Customer feedback remains overwhelmingly positive. And our recently launched car buying channel where we now buy cars directly from consumers is being embraced by consumers and performing well ahead of initial expectations. 02:42 We're extremely excited about the significant opportunities ahead and are more confident than ever that we will transform the car buying and selling experience in the UK and across mainland Europe when we launched there in the coming weeks. 02:58 Before we go into the detail of some more recent events I thought it would be useful to begin today's discussion with a reminder of our mission and why we are very well positioned for continued long-term growth. After that, I'll discuss our third quarter performance and outlook and will then turn the call over to Stephen to walk you through our third quarter financial results in more detail. 03:23 As we've shared with many of you, our mission of Cazoo is simple with pioneering the shift to online car buying and selling across the UK and Europe, a seven hundred billion dollars market with less than two percent digital penetration lagging almost all other retail sectors and right for digital transformation. It's an incredibly fragmented space with around one hundred and eighty thousand dealerships across the top ten markets in Europe and no incumbent with more than a small single digit percent market share. By leveraging data and technology to improve selection, quality, transparency and convenience, we are providing consumers with follow superior overall experience. 04:11 Given these market dynamics, we launched Cazoo In twenty nineteen to make buying and selling a car as simple and seamless as purchasing any other products online today. We've developed a powerful data and technology platform alongside critical physical infrastructure and in market leading brands to create a world class online retail proposition. We recondition store and deliver all our cars allowing consumers to simply and seamlessly buy, sell, finance or subscribe to a car entirely online. 04:48 I want to highlight some of the key competitive strengths that are helping to build most around our business and we will enable our continued growth. First, our fully integrated business model and comprehensive proposition is delighting our customers. We have a world class consumer NPS of approximately eighty and rating of four point seven stars with ninety three percent of our users, rating their experience is either excellent or great. 05:20 Second, We've developed unique capabilities with a market leading technology platform, a team of data analysts and an end-to-end infrastructure network of vehicle preparation centers, customer collection centers and car delivery transporters underpinning our growth and profitability. Third, we've assembled a world class team with a proven track record of accomplishments, including significant public market experience. Our senior team has been assembled from some of the leading digital consumer retail businesses across Europe. Finally, we have significant expertise and a track record of identifying and executing game changing strategic deals. Over the past eighteen months, we've made seven acquisitions and signed a number of commercial partnerships to accelerate our growth and enhance our team and proposition. 06:15 As a result, we now have eleven of our own vehicle preparation centers in the UK as well as four in mainland Europe and partnership with third parties. We've also opened twenty customer centers across the UK over the past fifteen months and with the leading consumer call subscription player in Europe with subscribers, across the UK, France and Germany. 06:39 Our ability to create a transformative consumer experience a highly recognizable and trusted brand and a world class team within one of the single largest retail markets right for disruption has allowed us to build one of the fastest growing businesses in Europe. Taking this all together, we've built a powerful business model with clear pathway to long-term sustainable growth. 07:05 Turning now to our third quarter performance. Our results reflect our continued growth trajectory as we leveraged our brand and unique platform in the UK which were in the final stages of preparing to replicate in Mainland Europe. Our third quarter revenues increased two sixty seven percent to hundred and seventy-four million pounds and our retail gross profit per unit increased by over a thousand pounds year-on-year and now sits at eight hundred and one pounds up significantly from four sixty seven pounds in Q2. 07:40 That's not to say that Q3 wasn't without its challenges, some of which may continue in the short-term, we've been enjoyed shortages of start as a result of COVID and shortages of inventory as a result of logistics issue, just relating to driver and fuel shortages, all of which hampered retail volumes to some degree, but are all short-term issues, none of which we expect to have any long-term effect on the business. 08:08 Ultimately, our record revenue performance came despite the fact that we have suboptimal levels of inventory available on our website during the period. Indicating demand for our offering was even stronger than our results shown. The biggest constraint to growth remains our ability to recondition cars in the volumes required to meet dramatically increasing consumer demand. But we've recently made a number of strategic moves to improve and increase our reconditioning capacity. 08:39 We firmly believe that owning the reconditioning process brings significant operational and financial advantages and our decision to bring reconditioning in house in the UK ahead of schedule earlier this year was exactly the right thing to do by bringing our process in house has led to a recent dip in vehicles available for sales during the transition. 09:01 Despite continued gains in production capacity, and in improving the selection for our customers, our website inventory levels are still much slower than we would like to be. We strongly believe that had – we had greater stock levels available on the website, we would have sold even more retail units in Q3. And therefore continuing to scale our reconditioning output remains a key priority. Through the remainder of the year, we expect to make additional progress in growing our inventory levels and the acquisition of SMH has provided us with significant additional reconditioning capacity to support our future growth. 09:41 Moving to profitability, our retail GPU has increased again to over eight hundred pounds in Q3 up from four sixty seven pounds in Q2 and an increase of more than one thousand pounds year-on-year driven by our improved buying mix, continued operational efficiencies and greater attachment rates of our ancillary revenue streams. In July, we successfully launched our car buying channel purchasing vehicles directly from consumers. Previously, we only purchased cars from consumers as a part exchange or trading when they were also buying from us. Consumers have embraced on new and unique and differentiated offering with uptake-to-date well ahead of our expectations. And we've been very encouraged with the volume of cars we're already buying through this new direct sourcing channel. 10:35 In Q3, we purchased six thousand seven hundred and sixty one vehicles directly from consumers. Up five fifty two percent year-on-year, diversifying our selection and improving our inventory acquisition costs. Within just a couple of months since our July launch, we've already seen the proportion of retail units sold that we sourced directly from customers rise to ten percent up from two percent this time last year and six percent in Q2. 11:08 Whilst the wider industry is experiencing supply constraints, we've seen limited issues in this area to date and have become less reliant on external sources of supply following the launch of our direct car buying channel, which we expect to provide a significant volume of vehicles in the future. We're confident that this new direct sourcing proposition will significantly change our buying mix overtime and help to further improve our future margins. 11:38 Our plans for expansion into France and Germany by year end remains firmly on track and we continue to grow our teams and develop our operations and infrastructure in both markets. Entry into mainland Europe will drastically expand our addressable market and is a significant growth opportunity for us over the coming years. Our end-to-end testing is going well, and we could not be more excited about the future growth prospects across Europe. 12:08 During the period, we also acquired Cazana, one of the leading data insights platforms in the European automotive space, and which owns one of the most comprehensive vehicle pricing data sets globally. This deal is enhanced our data team and capabilities and will enable us to further optimize our buying and pricing vehicles across the UK and Europe. Our strong performance this quarter is further proof of our compelling business model and the significant opportunity to grow our business. We have tremendous opportunities to continue to grow our share in this huge and highly fragmented market. 12:50 Now turning to the key drivers of our future growth and profitability. As a reminder, we plan to leverage our highly efficient business model in the following ways. First, by growing off revenues, we expect the growth in revenues to be driven by an increase in market penetration in share led by the shift to online buying and supported by the material growth in our in-house reconditioning capabilities. Also through increased tam with our European expansion and expansion of our product offering and with the launch to further ancillary products and higher attachment rates driving lifetime value. Second, by increasing our GPU. We expect the growth in our GPU to be driven by a continued shift in our buying mix including further success in the sourcing of cars directly from consumers, also through continued efficiencies in our reconditioning, logistics and stock turned with scale and further enhancements to our products, partnerships and processes. 14:01 Third, by reducing our (NYSE:TAC) , we expect the reduction in TAC to be driven by the growth in adoption of online car buying, growing substantially from less than two percent today. Also through improved conversion rates over time which will occur naturally as we grow our inventory and with a high proportion of direct traffic as a result of our brand investment, SEO and repeat users. 14:30 I'd like to take this opportunity to thank our amazing team that is now over three five thousand strong across the UK and Europe, and who put the consumers first in everything we do. Whilst we're incredibly proud of these Q3 results, we are still in the very early stages of transforming the car buying and selling experience across Europe and look forward to continuing our mission to delivering the best selection, quality, transparency and convenience to our customers. 15:05 Now I'll turn the call over to Stephen to review our quarter financial performance and the outlook for the remainder of the year in greater detail.
Stephen Morana: 15:14 Thank you, Alex and good morning, everyone. During the quarter, our revenues increased two sixty seven percent to hundred and seventy four point four million pounds, up from forty seven point five million pounds in Q3 twenty twenty. Our strong Q3 performance was the result of another record quarter of vehicle sales, increasing over two hundred percent year-on-year to thirteen thousand seventy four with the associated improvement in our ancillary revenues driven from retail sales. 15:46 Wholesale revenues have seen rapid growth as a byproduct of the significant success of our buying cars directly from the consumer. As a reminder, at this stage, we only sell cars on our website that are zero to six years old, with only sixty thousand miles or less on the clock. And any car that does fit this criteria is sold by at the wholesale channel. We will look to expand this over time but now a happy with this position. 16:14 Our strong growth came despite suboptimal levels of inventory on our website, as a consequence of our decision to bring the reconditioning process fully in-house in the UK ahead of schedule. Less inventory means lower conversion rate. As Alex said, this was absolutely the right decision to make and retail sales have remained strong despite this inventory challenge. We're now starting to see a small improvement in vehicles available on our website, up over ten percent from the lowest point in July, but it still remains below the optimum level. 16:48 Retail GPU increased a positive eight hundred and one pound from a loss per unit of two zero two in Q3 last year. We continue to improve all areas of the buying refurbishment and selling process. We expect to see this combined with continued operational improvements driving GPU forward over the coming periods. 17:08 Our gross profit was eleven point eight million pounds a six point eight percent margin. This compares to a gross loss of zero point seven million pounds or a negative one point five percent margin in the third quarter last year. We completed two acquisitions in the quarter, Cazana at the twenty five million pounds and SMH for seventy million pounds with both transactions funded by cash. Our cash position remains strong having raised proceeds of approximately eight thirty six million dollars net of fees during the spot process. 17:41 Looking forward to the remainder of the year, we continue to see very strong demand from customers for both buying and selling cars. We expect retail units sold to be linked closely to the number of vehicles available for sale on our website, which we expect to continue to grow during in Q4. As we make further progress with our repositioning efforts. 18:02 We forecast twenty twenty one revenues of over six fifty million pounds excluding the fifteen million to twenty million pounds of sales where we sell vehicles as an major prepared classes. This six hundred and fifty million pounds would imply Q4 growth of over twenty five percent quarter on quarter over two hundred percent year-on-year. 18:21 Thank you all very much for listening. I'll now hand you back over to the operator and we'll commence to Q&A.
Operator: 18:29 And at this time, we will be conducting a question-and-answer session. Our first question is from Catherine O’Neill with Citi. Please proceed with your question.
Catherine O’Neill: 19:04 Hi. Thank you. I've got three or four questions actually. Firstly, I just wanted to see if you could provide a bit more detail on the refurbishment transition and to what degree that dampened your retail units. I think you mentioned it starting to ease with more units on the site now and whether looking into twenty twenty two, the plans for sort of one hundred and twenty eight thousand retail units is reasonable based on your, sort have accelerated refurbishment in-house. 19:34 Secondly, on the revenue guidance the year, I just want to be relatively bit more color on the mix between those three divisions. I guess, in particular the wholesale mix on units looks a bit higher, which I guess is due to the uptake of the consumer selling. Could you maybe talk about how you think about consumer sourcing in another thirty percent? I think you targeted sort of medium-to-long-term from consumers, but maybe that's coming to more quickly? And then finally, on GPU, how much of the GPU uplift you're seeing is dynamics in the car market, I guess where actually these assets are appreciating? And how much of the GPU expansion do you think we could see go forward if the consumer sort think increases more rapidly?
Alex Chesterman OBE: 20:19 Thank you. Okay. I'll take those income. So, first of all, on reconditioning and the transition from outsource to bring this in-house. As we said, strategically, the right thing to do both from a control of quality and improvements of margin and controlling the whole process and improving GPU so if think about the last twelve months, a year ago today, we had two reconditioning sites in the , one, which we own the relatively small one and one in partnership with the third party where we are today is that we have eleven sites in the UK that we own. So we've made massive strategic strides over the last twelve months. Do you think about those sites we acquired, those were businesses operating conditioning for third parties, but we're at full capacity. And so we have not been able yet to take overall that capacity for Cazoo so the next twelve months was the last twelve months have been focus on strategic dissolving for bringing reconditions in-house long-term and we have the long-term now capability first two or three years, we need to now work on the operate issues of increasing number people on those sites, changing the shift pattern is reducing their partners. So I think will be twelve months from today, but the sites will be fully operating exclusively for Cazoo. They will be operating largely 24/7, it's been five shifts that process improvement. So there is a lot to come in terms of improvement. 22:13 In terms of the question about how much did reconditioning capacity and available cars on the website impact retail sales, I would say the answer of that is significantly because what we see is that we don't have a demand challenge in this business at all. If we are able to buy cars, reconditioning them and price them sensibly. We appear to have very little difficulty in selling people love our proposition. So as progress through the remainder of this year and the first also of twenty twenty two, we are comfortable that we can need those targets and we'll have the capacity as we put those operational changes into place. In terms of the second question on the split of revenue and guidance, there are three key areas of the business as you know, retail, wholesale and other revenues, which include a variety of things our ancillary revenue, subscription revenue etcetera. 23:27 We see the mix being large development with guidance probably in the early part of next year as a result of the very strong success of our car buying channel, which is going much better than we expected has two impacts on the business. One is they're both related to this question, one is in terms of the wholesale mix is likely to be slightly higher whilst car retail inventory is lower than we anticipated, so we'll have a slightly higher mix of wholesale. I imagine in Q4 and into the early part of point two as we're buying far more cars from consumers than we anticipated and obviously, those that we don't have the capacity to recondition, we will wholesale and the other impact of that of course is the question you asked about the buying mix and how it changes the buying mix at a long-term target of thirty percent of cause that we sell being sourced directly from consumers. We see significantly beating that target and getting to the thirty percent much quicker than we originally anticipated and long-term getting low beyond that to fifty percent plus based on the success that we've had since we launched that in July of this year. 24:56 In terms of GPU and the market dynamics and it's impact. I think it's relatively muted actually because what you've seen in the market with increased demand has been an increase in both the sales price or consumers are paying but also significantly more demand and price inflation in the wholesale markets, what we're paying for cars. So those two things have largely moved up in tandem. And if I sort of loop that back to the answers the first question, why was it strategically important to move reconditioning in-house? I think you see that all in the GPU, which is if you look where our GPU was twelve months ago, versus today, a lot of that to do now doing the reconditioning ourselves as well as improving ancillary product sales, etcetera. So there's been a trade-off between the benefits of quality and margin of taking reconditioning in-house with a slight trade off short-term in volume, but of course, long term, we will get asset both greater volume and greater margin, and that's exactly what we're aiming require that all gross questions.
Catherine O’Neill: 26:22 Yes, that's very clear. Thanks.
Operator: 26:31 Okay. And there are no more questions from Catherine. Our next question is from Jamie Bass with Berenberg. Please proceed with your question.
Jamie Bass: 26:43 Yeah, hello everyone. Just two for me, please. One is on the sort of wider market so in terms of the correlation between new car sales and second hand inventory so how do you sort of quantify the correlation so say when we see a pickup in new car sales, how much do you think that translates to second hand inventory entering the market? And what's the lag on that? The second question you've sort of kind of addressed already, but given everything you can saying about the constraints and reconditioning is it say to expect that in the near term will be seeing more M&A similar to SMH? Thank you.
Alex Chesterman OBE: 27:22 Thanks, Jamie. The dynamics between new and used cars, there are really two correlations. One, which is a pretty new phenomenon and hasn't really been seen on that is. What happens in a world where people who wanted a car and one to day new car, but were unable to get it because of the shortage of all the lead time from order to delivery, which is much higher now than it has been historically. So what that done is for people who need a car I don't want to wait to drove them into the used car whereas they would have been in the new car markets and in terms of the longer term impact if you look at the average age of a car that we sell, it's about three to four years old and so any shortage today, we will have been in the new car market is likely to show up as a shortage in the used car market in two, three, four year time. 28:32 I actually think that's unlikely to happen on what you will see is and under support new cars, this year and over supply next year. So it's a relatively short term thing that gets reversed pretty quickly. In terms of M&A, We look at M&A where it can help improve our infrastructure. So as an example where we've done deals like SMH or customer sends or we can enhance our team or product proposition or expand geographically. So we continue to grow very strongly organically but where there are opportunities to accelerate that growth or to improve the team, the product, the infrastructure, any of the modes that we talked about that we're building around the business, if there is an opportunity, to do that buyer M&A and we can buy those businesses sensibly and they will help to accelerate then we'll consider those things both in the UK and in Mainland Europe and obviously, pushing into additional markets in Europe is a key focus. I think as you know, we are looking to launch in France and Germany before the end of this year and I expect that we will be in more markets in Mainland Europe by the end of next year than we originally anticipated. I hope I answered your questions.
Jamie Bass: 30:18 That's very clear. Thank you.
Operator: 30:24 And our next question is from Rajesh Gupta with JPMorgan. Please proceed with your question.
Rajesh Gupta: 30:33 Hi. Good morning. Thanks for taking my questions and congrats on getting the first quarter out of the way. So just I have a question, on reconditioning capabilities, given like you're now transitioning into more in-house reconditioning, You see an opportunity to widen the inventory spectrum that you're targeting and catering to relatively higher margin all the vehicles. Just curious as to the pathway there and I had a couple of follow-ups as well. Thank you.
Alex Chesterman OBE: 31:04 Yeah. Good morning. Yes, look now that we have transitioned to hundred percent in-house, it gives us more control over the process and it lags us to extend what's been a very tightly defined inventories and particularly since we are acquiring so many cars now directly from consumers, it allows us when we look at the inbound inventory, historically, we were going out and targeting very specific inventory from third party sellers, but now we're buying everything that consumer wants to sell to us at the price that we said. That is naturally giving us inventory historically we wouldn't have gone out and bought. So mileage older age and I would say our first priority is to optimize all these operational areas around our vehicle preparation centers. So improve the process flows, improve the number of shifts that we brought. There are a number of steps that we have to make, but absolutely in the long-term in the whole process, that allows us to be much more flexible in terms of the inventory set that we hold and I think that will be – that result is that why that selection.
Rajesh Gupta: 32:41 Got it. Got it. That's great color. And then any incremental color you could give us on the vans 365 acquisition, new just any broad color on the market opportunity there, what unit economics look like versus the light vehicle business just any further thoughts from that front might be helpful? Thanks.
Alex Chesterman OBE: 33:05 Yes. So vans are really incredibly natural product extension. I sort of described them as you know, just different makes or models of cars, they're slightly bigger cars. They are – the things in every other way. So it's a very, very natural thing for us to do. It increases our addressable market that in the UK alone, there are million of these light commercial vehicles, so vans sold annually and what we know is that all consumers are the same consumers who are looking for these vehicles and the ways of marketing are exactly the same via aggregators etcetera. So there is no additional customer acquisition cost for us, benefit of actually increasing thoughtful available vehicles on our website because metrics stands the offering and driving up our compulsion rates because the same customers who are looking to come sell or buy vehicles from us of the thing. So that acquisition has provided with expertise in that space because are a number nuances, it also expands you into business customers. So payment is an opportunity there. So we have acquired a great team or a specialist in that area. We've also obviously will benefit from acquiring additional inventory, which is by that business, expect to integrate those – that by launch vans .
Rajesh Gupta: 34:52 Got it. Great. This is one last question, but more like a broader macro question. You mentioned in one of the earlier responses, which was interesting around the potential oversupply of new vehicles next year. This is curious as to why you think that might be happening particularly given we are hearing more and more about some more supply chain bottlenecks in the auto industry, obviously semiconductor has been an issue, but we're also going more on Aluminium so you just curious, as I thought that was like an interesting comments. So just curious as to why that might happen.
Alex Chesterman OBE: 35:31 New cars have always been a product that one has ordered with a delivery time at some point in the future. So what is happening is there's backed up demand, so people are still placing orders in twenty twenty one, four cars that they would have historically expected to land in twenty one, but are being now told by the OEMs that those cars will land three, six, nine months later than originally anticipated. So you still have plenty of the demand for new cars, What happens is that the delivery is all getting back to us into twenty two and some of it may even can get back up into twenty three. I have my own experience of looking to for a new car where I was told that it might take twelve to eighteen months for deliver. Probably because a new model and partly because of the chip shortage so, but it doesn't necessarily turn everybody away people had to accept that okay, I will get our vehicles later I don’t think you have a significant sort of excess demand that gets fulfilled in Q2, Q3, Q4?
Rajesh Gupta: 36:49 Got it. Thank you and good luck.
Operator: 36:58 And our next question is from David Reynolds with Davy. Please proceed with your question.
David Reynolds: 37:25 Good morning. Good afternoon Alex, Stephen, and Rob, Thank you for that. If nobody has said this all already, up I think given the post COVID backdrop, that's a stunning performance in Q3. So well done all. If I may, I wonder if you could indulge me pleased with four questions. First, I think you announced SMH on fifteenth of September I wonder if you could perhaps expand on that a little bit and perhaps let us know when you would expect that to have a direct impact on your business. 38:07 Secondly, in terms of the European expansion, those analysts a simple folks. So I was wondering if you could perhaps give a sense as to when Cazoo will be executing in anger in both France and Germany. Thirdly, just with regard to the direct from consumer buying proposition that has clearly been extraordinarily successful across Q3. Perhaps you could explain why you think it has done so so well. And then lastly, just to cover off other income and the ancillary opportunity. Cazana are obviously executing their finance model very, very well. I was wondering if perhaps you could update us with any thoughts on when you would go into a finance proposition to assist business growth?
Alex Chesterman OBE: 39:07 Morning David. Thank you for plenty of questions there. So first of all, just to comment on what you said. And look, Q3 wasn't – definitely wasn't without its challenges. You mentioned COVID, it actually Q3 probably COVID had the biggest impact on our business since the beginning of the pandemic in terms of seeing staff shortages, people absent, supply chain shortages, drive shortages, and of course, in the back end of Q3 we have to enjoy fuel shortages as well in the UK, which for a business produced, offering the tank of free fuel with every car and delivering those cars, fuel shortages are one the most helpful thing. So despite all of those headwinds of Q3. Yes, we have growing quarter. In terms of the specific questions, SMH you're right mid September as well. We completed that acquisition and as I earlier, we get applied a business that had six sides, but capacity in servicing third party contracts. So there is a process to go through of serving notice terminating those contracts and repurposing those sites in terms of flow and people and shift happens to optimize for what our needs are. And that is all happening incrementally. There's sort of no step change in that. It's all happening a little bit every month and the combination of all those factors gets us to a place throughout the course of their year where one hundred percent of our eleven clients have focused entirely on our production out standard working in a much more efficient way and we see the ability to triple proportion for where in, for example September twenty one, in September twenty two with our existing sites that we now have, but that will be a gradual monthly improvement as we put in new processes and people at shifts some removed polymers. 41:33 In terms of the view expansion, we have been pretty conservative I think in terms of are modelling for the EU for next year. It looks a little bit like UK was in our first year, which was twenty twenty. We will launch before the end of this year, we are doing whole end-to-end testing in both markets currently it's going incredibly well. And then next year, we will start to ramp up our marketing and as I said a little bit earlier on this call, our expectation now given how well our preparation is going and how strong our team is in the EU is that we will be in a number of other markets beyond France and Germany in twenty twenty two. So I think there is some, we've been relatively conservative in our modelling for EU and you should expect to see us from a marketing perspective very much follow the same pattern that we did in the Uk. 42:37 We're building a very strong brands very quickly across those market. In terms of car buying, why has it gone much better than anticipated. I think a couple of reasons and we've got a very unique proposition and two the alternatives are relatively poor. So if you are prepared to buy cars from a consumer, pay them a sensible price, but then if you look at the unique elements of our proposition. We paid people the same day and often within a few minutes we've integrated unique payment solutions, so they get instant gratification on that, but also we offer guarantee price, we don't ship providing the consumer hasn't set anything that was from our vehicle of mileage or condition. The price we offer is guarantee which is not the norm in the market. There are a number of players who offer one price and then when they have you captive pay a different price, which we think is a full consumer experience. And finally, we are the only player in the market offering to come and pick it up from you. So, again, the traditional historic experience has been you either plastic change it have a dealership for when you buy new car or you set to a player where you have to drop it off and then you stranded it in car parked somewhere where you or you sell it properly and again, you're stranded somewhere. 44:13 And we offer the ability to either drop it off one of our customers and is all common collected for a fee. So I think we have a unique proposition which is really resonate but the consumers in terms of the experience, the honestly, the guarantee etcetera. Again in terms of ancillary revenues, yes, look what you've seen with corona and others is that actually the opportunity on GPU is higher than they had originally anticipated and a lot of this comes from ancillary. Revenues, we've always said the long-term, we see the split is about fifty fifty between the metal and the non-metal, particularly on finance, we see significant upside with a lot of work thinking about we have a very good partnership at the moment with and with our platform provider. But at some point, we will take this more in-house. We've started to think about that. And I think the only thing I'm prepared to say on that subject, today is that we had not modelled an opinion and so sort of the end of twenty twenty four to bring that in-house, and I would feel relatively confident and saying we expect to do it before then, but I'm not going to put a days on when.
David Reynolds: 45:45 Thank you.
Operator: 45:51 And we have reached the end of the question-and-answer session, and also this concludes today's conference. And you may disconnect your lines at this time. Thank you for your participation.
Alex Chesterman OBE: 46:02 Thank you, all.
