TOP NEWS: Auto trader profit down but online shift gives outlook boost

(Alliance News) - Auto Trader Group PLC on Thursday posted a substantial drop in annual earnings ...

Alliance News 10 June, 2021 | 8:51AM
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(Alliance News) - Auto Trader Group PLC on Thursday posted a substantial drop in annual earnings and revenue but gave an optimistic outlook as it highlighted growth in its online business and "record levels" of customers.

The online automotive marketplace posted a 29% fall in revenue to GBP262.8 million for the financial year that ended March 31 from GBP368.9 million. Trade revenue declined 31% to GBP225.2 million following a decision to provide free advertising to retailer customers in April, May, December and February and at a discounted rate in June.

Auto Trader's pretax profit slumped 27% to GBP157.4 million.

However Auto Trader has decided to reinstate its capital allocation policy and proposed a final dividend of 5.0 pence, versus no payout a year ago. With no interim dividend, this 5p will be the total dividend for the year, up from 2.4p the year before.

Shares in Auto Trader were up 5.8% at 611.24 pence on Thursday morning in London, the best FTSE 100 performer.

The Manchester-based company pointed to an "accelerated" shift to online sales, with a "significant future opportunity" to expand further in the space. In July, Auto Trader acquired finance and insurance platform AutoConvert, which it says has enabled more of the car buying process to be brought online.

"There has been a dramatic shift towards buying online which means we now have more buyers than ever turning to Auto Trader to help with their next car purchase, making us even more relevant to retailers and manufacturers," commented Chief Executive Nathan Coe.

"This positions us ideally to enable the buying and selling of cars online, which will materially improve the car buying experience and the business of our customers."

Physical sales for the year suffered as a result of the pandemic. Average revenue per retailer forecourt for the recently ended financial year was GBP1,324, down 32% on GBP1,949 in the 2020 financial year. The operating profit margin fell to 61% from 70%.

Auto Trader has started the new financial year in a strong position, it said, and expects to deliver deliver high single digit growth on the average revenue per retailer achieved in the 2020 financial year - meaning two years prior - with operating profit margins in line with 2020 levels.

Despite unusually "strong demand and tight supply", Auto Trader said Covid was currently having little impact on its financial performance although cautioned that this could change rapidly depending on the direction of the pandemic.

By Will Paige; willpaige@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Auto Trader Group PLC 652.00 GBX 1.02 -

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