Auto Trader reports jump in first-half revenue, earnings

(Sharecast News) - Auto Trader Group reported first-half group revenue of £280.5m on Thursday, representing a 12% year-on-year increase. The FTSE 100 automotive retail marketplace said Auto Trader revenue was up 9% at £259.4m, while Autorama experienced 82% revenue growth to £21.1m.

Its operating profit reached £164.6m, making for a 10% increase.

Auto Trader's operating profit margin remained stable at 71%, while the group's margin slipped one percentage point to 59%.

Basic earnings per share rose 4% to 12.74p, as the group generated cash from operations of £184.2m, up 12% on the prior year.

Additionally, adjusted EBITDA increased 9% to £182.1m, and adjusted earnings per share rose 2% to 13.96p.

Auto Trader said its core marketplace business exhibited strong growth, with a 9% increase in revenue and a 10% rise in operating profit, maintaining an operating profit margin above 70%.

The growth in average revenue per retailer (ARPR) by 12% was attributed to the continued adoption of additional products and services and a successful pricing and product event in April.

That was supported by the Auto Trader Connect module, 'Valuations,' which makes retail valuations accessible to all customers via API or within the retailer portal.

Auto Trader said the used car market was proving resilient, with record buyers on its platform.

Stable consumer sentiment and the availability of finance contributed to the growth, while used car pricing remained strong, and vehicles continued to sell faster than pre-pandemic levels.

Auto Trader's 'Deal Builder' product, which allowed car buyers to value their part-exchange, apply for finance, and reserve cars online, was also progressing.

Approximately 500 retailers were trialling the service by the end of September, with consumer feedback positive.

Meanwhile, structural changes in the new car market provided opportunities for the group, as it launched a new car market extension product, enabling manufacturers operating under an agency model to advertise new cars directly to consumers.

The integration of the new car leasing proposition, Autorama, was underway, yielding cost savings and anticipating volume growth when supply returned to the channel.

Looking ahead, the board said it was confident in the second half, as recurring revenue remained stable, and the first-half growth event successfully executed.

Retailer revenue growth was expected to continue, with price and product levers performing well.

Auto Trader's operating profit margin was expected to remain consistent, while group margins were expected to increase year-on-year.

For Autorama, the outlook for 2024 remained unchanged, with group central costs expected to be around £21m.

The group said its capital policy remained focused on returning surplus cash to shareholders through dividends and share buybacks.

"It has been a strong start to the year with more buyers spending more time and completing more of their car buying journey on Auto Trader," said chief executive officer Nathan Coe.

"We are working in partnership with record numbers of retailers and manufacturers, who are turning to our platform as the most effective and efficient way to source, price and sell their vehicles.

"We remain confident in our long-term prospects given the strength of our business and the opportunities to deliver meaningful value for car buyers, customers, our people and shareholders."

At 0827 GMT, shares in Auto Trader Group were up 5.98% at 673.4p.

Reporting by Josh White for Sharecast.com.