Good stuff Phillip and agree on your points. I like the...

Good stuff Phillip and agree on your points.

I like the register.
I like the mgmt.
I like the business model.

If we view Carsales as the online classified business, par excellence, then we can view their foray into Brazil last year as an indication of the growth prospects in Latin America. LatAm seem to have steered clear of Brazil, most likely due to the competition in that market; perhaps also in part to their native Portuguese language.

If we look at Carsales domestic operations, the revenue results have been strong, despite a weakening Australian economy. This is relevant, as while Latin American economies are also struggling at the minute, the Carsales results demonstrate that the product is somewhat insulated from a weakening economy; certainly more so than less inelastic goods, such as discretionary clothing. Coupled with the growth in vehicle ownership in these countries and less competition, LatAm could do quite well over the next 2-5 years and despite not expecting to see any significant profit for 2-3 years, if the market can see trending revenue and successful rollout of the business model, the mc shouldn't stay at this level 12 months down the track. Really just need to sit tight now and see if mgmt can put the $40M to good use.