2 Cheap Cars Group Limited Analysis

Overview

2 Cheap Cars Group* is an integrated used automotive group operating throughout New Zealand. We are vertically integrated from procurement in Japan through to our retail branches nationwide. Operating under the “2 Cheap Cars” brand, our Automotive Retail company is one of the largest used vehicle sellers in New Zealand with 12 dealerships across the country.

Our mission is to deliver on our promise… 2 Cheap Cars, driving better deals, every day.

*2 Cheap Cars Group was previously known as NZ Automotive Investments (NZAI).

Performance

The following information was extracted from 2 Cheap Cars Group Limited half year results, released 13 November 2025

2 Cheap Cars Group Limited (NZX:2CC) has reported net profit after tax (NPAT) of $1.01m for the half year ended 30 September 2025 (HY26), down from $1.67m in HY25.

Summary of key results

(Figures quoted are in NZ dollars; comparisons are made against HY25)

• Revenue and income: $39.77 million down from $42.01 million

• Gross margin YTD: $7.86 million, down from $9.06 million

• Underlying EBITDA (including finance income): $3.1 million, down from $3.8 million

• Net profit after tax (NPAT): $1.01 million, down from $1.67 million

• Underlying earnings per share (EPS): 2.2 cents per share vs 3.7 cps

• Vehicle sales: 3,604 units, down 13%

Performance overview

The first half of FY26 was challenging, with continued economic weakness, margin pressure, low immigration numbers and high regulatory costs directly impacting the used-vehicle industry, and the cost-of-living crisis weighing heavily on consumer confidence.

These conditions saw revenue decline 5% to $39.8 million in the first half of FY26, reflecting lower sales volumes. This was partially offset by improved retail pricing and stronger finance and insurance penetration. Finance penetration rose to 32%, up five percentage points, while insurance penetration reached 41%, supported by lower interest rates and effective sales execution.

Gross margin decreased by two percentage points to 19%, primarily due to the impact of carbon tax costs under the Clean Car Standard. The $0.7 million decrease in NPAT primarily reflected the $0.7 million after-tax impact of the Clean Car Standard, as other favourable and unfavourable movements largely offset each other.

However, the Group continues to maintain a strong balance sheet, with $4.6 million in cash, stable debt levels, and inventory carefully managed to align with current demand.