The founder of online car retailer Cazoo is to step down as CEO after it missed targets and saw its share price plummet around 98%.
Alex Chesterman OBE will move to the position of executive chairman from April, at which time COO Paul Whitehead will take over the day-to-day CEO duties.
It said this will allow serial entrepreneur Chesterman to focus on the strategic direction of the business.
David Hobbs will step down from the board of directors at the end of January with Mary Reilly – a board member and audit chair of companies including MITIE Plc, Essentra Plc and Mar Holdco Sarl – joining.
Despite growing UK revenue to £315 million in Q4 2022 and more than £1.2 billion in FY 2022, the New York-listed firm revealed plans to close more preparation centres and customer handover sites as it seeks a path to profitability.
It has disposed of its Italian and Spanish businesses in recent months, while its French and German operations have been largely wound down with the exception of subscription operations.
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“In the current economic environment we believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway,” it stated.
“To enable these improvements, we are resetting our 2023 top line ambitions to 40,000-50,000 UK retail units, allowing us to focus on higher margin and faster moving inventory and to rationalise our operational footprint.
“Following this reset, we expect retail unit sales to return to growth in FY 2024 and beyond.”
It said the cuts are in the process of being finalised, with more detail to follow in its full FY22 results.
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Earlier this month the New York Stock Exchange began the process of de-listing warrants for Cazoo as a result of “abnormally low” price levels.
Under NYSE rules, companies must have a closing share price above $1 for 30 consecutive days. From a high of $14 in February 2021, their price dropped below $1 in August and hit an all-time low of 13 cents in December.
Cazoo’s shares are currently trading at 21c. The company said it would consolidate its shares to bring the price back into compliance.
“I am pleased with our progress in Q4 despite the challenging economic backdrop,” said Chesterman. “We had another strong quarter of UK retail unit sales, up over 100% YoY, and we have now sold well over 100,000 cars entirely online in the UK in just 3 years since our launch.
“We remain, however, extremely mindful of the current economic environment and believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway.
“During 2022 we have proven our ability to buy and sell cars at scale. Our new 2023 plan, which includes more modest top line ambitions, ensures that we continue to improve our unit economics, reduces our fixed costs and conserves cash as we make continued progress towards our goal of reaching profitability, without the need to raise further funding over the next 18-24 months.
“Whilst 2022 was a challenging year in many respects, our continued strong growth, notable improvement in unit economics during each quarter and market-leading consumer feedback gives us strong confidence in the long-term opportunity for Cazoo.”