Manchester-based FTSE 100 firm Auto Trader Group plc reported a sharp increase in revenue and profit for the financial year, saying vehicle sales are now exceeding pre-pandemic levels.
The UK’s largest automotive marketplace said record numbers of buyers and sellers used its services in the past year, helping to increase group revenue 14% to £571 million and group operating profit 26% to £349 million.
The company, which runs an online marketplace and classified ads business, used by both individuals and trade retailers, said average revenue per retailer grew 12% in the year, driven by continued uptake of additional products and services and a successful annual pricing and product event on 1 April last year. It said the used car retail market has been robust throughout the financial year, which it expects to continue.
Its shares rose 15% to 841p on the London Stock Exchange.
“Demand is resilient with cars continuing to sell faster than before the pandemic and used car supply has gradually improved,” the company said in a statement. “Trade prices softened in the latter months of the calendar year, which subsequently impacted retail prices, but monthly pricing movements have since stabilised in line with typical seasonal trends.” It added that the new car retail market has been more challenging and discounting has started to return.
The company said more than 75% of all minutes spent on automotive classified sites are spent on Auto Trader.
“This has been another year of strong financial, operational and strategic progress for Auto Trader,” said CEO Nathan Coe. “More than 8 in 10 car buyers now use Auto Trader during their car buying journey and two thirds of buyers only use Auto Trader. Our data and technology continue to underpin the UK automotive industry and we are constantly innovating to help our retailers access the very best tools to achieve their business goals.”
He added: “We are confident in our prospects for the year ahead and, in the longer term, we see significant opportunities to continue growing our marketplace and to move more of the car buying process online, on Auto Trader.”
Keith Bowman, Equity Analyst at interactive investor, said: “Auto Trader has detailed robust full-year results, and the new financial year has started well. High interest rates mean it can still be expensive for people to finance the purchase of a vehicle, and it’s interesting to see Google taking an interest in the UK motoring market. Costs generally for businesses also remain elevated, while potential for forecourt consolidation persists as operators such as Cargiant and Motorpoint look to grow.”
He added: “On the upside, Auto Trader is still the dominant market player and continues to spend on innovation. More and more dealers are trialling its ‘Deal Builder’ product, which allows car buyers to value their part exchange vehicle, apply for finance, and reserve a vehicle online. Group net bank debt has also reduced significantly.”