Carsales' new chief executive, Cameron McIntyre, was never going to steer the online classifieds giant on a very different course to his predecessor, company founder Greg Roebuck.
But McIntyre's first result as CEO does show a willingness to drive the Carsales vehicle a touch faster off the beaten track.
Buried towards the bottom of Carsales' results presentation was a fascinating slide that quantified, for the first time, the size of the revenue opportunity that it could capture in the international markets is has been quietly building up.
In Australia, an economy with a GDP of $1.6 trillion, Carsales' revenue is $267.2 million. Using that GDP to revenue ratio as a broad guide, Carsales says its South Korean business – which currently does $45 million in sales – could eventually grow that 7 times, to around $313 million.
In Brazil, revenue could eventually grow from $44.6 million in 2016-17 to almost $400 million. In Mexico, revenue could grow 375 times from $600,000 to as much as $232 million. Argentina, where Carsales is a relatively new player, the company sees scope to lift revenue by 51 times, from $2.4 million to $121 million.
'Long-term opportunity'
McIntyre, who fits the Roebuck mould of focusing on steady, consistent growth, wasn't trying to overplay the opportunity – that wouldn't seem to be his style – but he was keen to demonstrate how these businesses would grow to be a more important part of Carsales' future.
"No matter how you look at it, there is substantial long-term opportunity for us to grow in those markets," McIntyre told investors on Wednesday morning.
Clearly, boosting revenue in territories such as Korea and Brazil will take time – particularly given the ups and downs that developing economies can have. Brazil has been a battle for Carsales since it entered the market in 2013, although it reported there are signs the economy there is picking up.
But as the very strong and still growing margins in the Australian business demonstrates, when you get it right there are big earnings on offer for the leaders in any particular market.
In Australia, Carsales lifted revenue from private sellers by 27 per cent over 2017, by selling more and more premium listing products – a sign of Carsales' market dominance and its pricing power.
If Carsales can bring the intellectual property it has developed in Australia to dominate its international territories – and then ride the economic bumps each market will inevitably throw up – then it can create a new platform for growth.
