30th May 2024 15:37
(Alliance News) - Auto Trader Group PLC shares jumped on Thursday on a full-year revenue beat, and the online marketplace for new and used cars set out a "confident" outlook.
Shares jumped 16% to 846.20 pence each in London on Thursday afternoon. It is up 17% so far this year. The FTSE 100 has climbed 6.4%.
interactive investor analyst Keith Bowman commented: "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.
"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. The shares are not cheap after outperforming the FTSE 100 index over the last year, but while they may appear to be 'up with events', Auto Trader looks to remain a core holding in the sector, with consensus City opinion pointing towards a strong hold."
For the financial year that ended March 31, Auto Trader reported GBP345.2 million in pretax profit, up 18% from GBP293.6 million in financial 2023.
Revenue rose 14% to GBP570.9 million from GBP500.2 million, with double-digit percentage growth reported across all business segments.
Adjusted earnings before interest, tax, depreciation and amortisation increased 14% to GBP375.3 million from GBP328.0 million.
Basic earnings per share were up 13% to 28.15 pence from 25.01p a year prior.
With a proposed final dividend of 6.4p per share, up 14% from 5.6p a year before, Auto Trader increased its full-year dividend also by 14%, to 9.6p from 8.4p.
Chief Executive Officer Nathan Coe said: "This has been another year of strong financial, operational and strategic progress for Auto Trader. 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."
Looking ahead, Auto Trader said that the new financial year had started well, and the company expects another year of growth in average revenue per retailer.
In financial 2024, average monthly revenue per retailer increased by 12% to GBP2,721 from GBP2,437.
The company expects losses in its Autorama business to be reduced further over the course of the year, having narrowed to GBP8.8 million from GBP11.2 million in financial 2024.
"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," Coe added.
By Eric Cunha, Alliance News news editor
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