Manchester-based Auto Trader Group plc, which runs the UK’s leading site for new and used cars, said half-year sales and profit grew, as the second-hand market remained brisk.
The company reported 8% growth in revenue to £302.5 million, helped by better than expected growth in retailer forecourts. Operating profit increased by 14% to £188.4 million, helped by higher sales and a reduction in central costs.
However, Auto Trader‘s shares fell almost 8% as the firm gave a mixed outlook for the full year.
Auto Trader said: “Retailer forecourts are likely to remain strong and be broadly consistent with that reported in the first half. As this increase came from smaller lower yielding retailers, the growth in both the price and product levers was diluted, which we also expect to continue. Compared to our original outlook, the impact on revenue from having more retailers but with lower price and product contribution should broadly cancel each other out.
“Previous guidance on other revenue lines, Autorama losses, Auto Trader and Group operating profit margins and capital allocation policy remains broadly unchanged.”
The company said the new car retail market remains challenging, with a 10% decrease in first half volumes on depressed levels seen in the prior year, despite an increase in discounts being offered by manufacturers. It said total registration volumes were broadly flat, with the fall in retail volumes being offset by growth in the fleet segment. Since January, the share of battery electric vehicles as a percentage of total car sales increased to 18%, although it remains short of the 22% target required under the Zero Emission Vehicle mandate for calendar year 2024.
Nathan Coe, Chief Executive Officer of Auto Trader, said: “Our strong results for the first half of this year reflect the record numbers of customers choosing to partner with us to retail vehicles and drive the performance of their businesses.”
“We are confident in the outlook for the business given our strong market position, and the opportunity to use our unique data, technology and AI capabilities to improve the way vehicles are retailed in the UK.”