Latam Autos: Good connections drive car classifieds hopeful

The well-backed Latin American car classifieds house had a compelling yarn to tell when it listed in December 2014, given the region’s rapidly rising rates of both car ownership and internet penetration.

The presence of the giant Carsales.com in the region has fostered perpetual intrigue about a takeover. But after a bright start Latam Autos investors have been driven down the wrong road and have lost two-thirds of their dough. As with so many tech companies, Latam’s underperformance has been a case of too much red ink, too little revenue and too little management of expectations along the way.

But this week’s September quarterly report shows the company — 12 per cent owned by former AFL supremo Mike Fitzpatrick — finally might be kicking goals after a radical business overhaul in April.

While still modest, cash receipts grew 21 per cent to $1.9 million and net cash outflows decreased 46 per cent to $2.1m. Cash burn eased 46 per cent to $702,000.

Executive chair and co-founder Tim Handley expects Latam to break even in the second half of calendar 2018. “This is the first half where the fruits of the restructure are showing themselves,” he says.

Apart from slashing costs by 40 per cent, the revamp saw Latam focus on the Mexican market and Ecuador’s emerging economy. It has also exited Argentina and has put its Peru and Panama operations on hold.

Read the full article here — http://www.theaustralian.com.au/business/good-connections-link-car-classifieds-hopeful-and-emergency-insurer/news-story/6cc28be8a62a96b9af92493b7c281d6c