Profits at Manchester based Auto Trader hit the £114.5m mark
Manchester based Auto Trader saw its profits increase by nine per cent last year to £114.5m.
The company published half year results this morning.
Revenue at the firm were up 7% to £176.8m and operating profit was up 10% to £120.6m.
Profit before tax was up nine per cent to £114.5m.while cash generated from operations was up 12% to £129m.
Net external debt went down to £319.4m and the firm returned £80.8m to shareholders through £42.9m of share buy-backs.
Trevor Mather, chief executive, said: “We have had a great first half of the year driven by strong adoption of new products and advertising packages by both retailers and manufacturers.
“We strengthened our market leading position with our audience of car buyers, by continuing to focus on providing the best car buying and selling experience in the UK.
“We do this by providing the best choice of cars, free valuations, extensive reviews and most recently showing finance options, so that car buyers can understand the monthly cost of owning their next vehicle.
“Despite a more challenging automotive market, we see many examples of our customers achieving strong results in their used car businesses by using Auto Trader services which help them to select, price and most effectively advertise their vehicles.”
The strong first half means revenue growth for the full year is likely to exceed previous guidance.
The company said the form of any Brexit deal is likely to affect Auto Trader only as much as it impacts on both general levels of consumer confidence and the supply of new cars into the UK market.
A statement said: “We do not foresee any issues with Brexit affecting our ability to provide our services, or to materially change our cost base.”
Russ Mould, investment director at Manchester-based investment platform AJ Bell, said: “The better-than-expected first half results from car listings site Auto Trader mean that the damage to the share price caused by eBay’s recent acquisition of its rival Motors.co.uk has been repaired.
“The fact these numbers were achieved against the backdrop of a fragile new car market also addresses one of the other key concerns dogging sentiment towards the stock.
“Even though around 80% of its business comes from used cars, inventory growth has at least some reliance on part-exchanged used cars.
“But its ability to crank up average revenue per retailer by upselling existing clients to premium products, despite a falling number of vehicles on the site, is testament to the robustness of the subscription-based model.
“And with full page advert views ticking up to 247 million per month and visits to its online platforms of nearly four times its nearest rival, investors may draw greater confidence on its ability to see off any competitive threat posed by eBay’s ambitions in this space.”
He added: “Auto Trader’s strong brand and entrenched position could make it tough to shift from its position as market leader.”
