Auto Trader first-half revenue falls 37% to £118m

Manchester-based Auto Trader Group plc — the UK’s largest digital marketplace for cars — said on Thursday its revenue fell 37% to £118.2 million for the six months ended September 30, with profit before tax falling 48% to £66.2 million.

The company said it will make its advertising packages free for the month of December for all retailer customers in the UK and extend payment terms by a month for November services. 

On dividend policy, the firm said: “It is our intention to return to our long term capital allocation policy as early as possible, but following the recent government announcement (on new lockdown restrictions) we will not be declaring an interim dividend.”

In its outlook, Auto Trader said: “Given the continued uncertainty surrounding COVID-19 and further customer support in December, it is difficult to provide sensible revenue guidance for the balance of the year.”

However, the company said it has started the second half well with audience volumes remaining substantially above prior year levels.

Auto Trader shares rose almost 2% to around 604p to give the firm a current stock market value of almost £6 billion.

Auto Trader CEO Nathan Coe said: “The past eight months have represented perhaps the greatest challenge ever faced by our company and our industry.

“However, as a result of the early and decisive actions that we took to protect our people and support our customers, we believe that our business, culture, and customer relationships are in a strong position.

“Our Q1 performance was heavily impacted by our decision to support our retailer customers by allowing them to advertise for free during the months of April and May, and for a 25% discounted rate in June.

“Since that time the used car market has bounced back strongly.

“We have seen a steady increase in the number of retailers advertising on our platform and our revenues in Q2 were only marginally down on prior year, with profits flat. 

“The recent government announcement once again restricts our customers’ ability to meaningfully trade.

“As we have announced today, we remain committed to supporting our retailer partners by making our advertising packages free for the month of December and extending payment terms by a month for November services.

“I want to thank all our employees, customers, suppliers and our loyal car buyers for their support.

“The coming months will no doubt present many challenges, but we are confident in our ability to navigate these successfully, while continuing to execute our long-term strategy to enable retailers to bring more of the car buying process online.”