- Revenue up 14% to £570 million
- Operating profit climbs 26%
- Shares gain another 12%
Shares in Auto Trader (AUTO) jumped by 94p or 12% to a new life-high of 825p as the online car marketplace reported a 14% increase in group revenue to £570.9 million for the year ended 31 March 2024.
The FTSE 100 firm said the used car retail market had been robust throughout the past financial year and it expected the trend to continue.
AD INCOME AND USERS UP
Average revenue per retailer or ARPR grew 12% over the year, helped by the continued uptake of additional products and services and a successful round of price rises and product launches in April 2023.
Over the past 12 months both the marketplace and the group's competitive position have strengthened, according to the firm, with record numbers of buyers and sellers using Auto Trader.
The firm is 10 times larger than its nearest classified competitor and accounts for over 75% of all minutes spent on automotive classified sites, while at the same time there was a small increase in UK retailer forecourt numbers.
More than eight in 10 car buyers now use Auto Trader during their car buying journey and two thirds of buyers only use the website.
Chief executive Nathan Coe said the new financial year had started well and he was ‘confident in our prospects for the year ahead’ and, in the longer term, there were significant opportunities to continue growing the marketplace and to move more of the car buying process online.
TRIAL PHASE
The group gave an update on its new ‘Deal Builder’ product which enables car buyers to value their part-exchange, apply for finance and reserve a car on the site.
‘The product is still in trial phase but scaling well with circa 1,100 retailers onboarded at the end of March 2024.
‘During the year we have seen circa 16,000 deals with at least a reservation and continue to receive positive feedback from both buyers and sellers.’
EXPERT VIEWS
Roddy Davidson at Shore Capital said the online car marketplace delivered ‘strong full year results’ with ‘further advances in the group’s digital retail strategy.’
Davidson noted however the ‘challenging’ new car retail market with ‘discounting in evidence’ and expressed slight disappointment that losses at Autorama were not reducing more rapidly.
‘This was always intended to be a strategic acquisition for the business (accelerating its position in the leasing market) but has, to date, been a distraction form the quality and progress of its core operations’, commented the analyst.
Fiona Orford-Williams, director technology and media research at Edison, was also positive on the latest set of full year results: ‘Auto Trader continues to innovate, increasingly using AI to smooth the customer journey, making good use of the large quantities of proprietary data within the business.
‘The group generates good levels of cash within its business and returns to shareholders have been significant at just over £250 million in the year to March through dividends and share buybacks.'
