Profits pass the £242m mark at Manchester based Auto Trader
Profits before tax increased by 15% to £242m at Manchester based Auto Trader over the last 12 months.
The firm, which published its final results this morning, said revenues were up 8% to £355m.
Meanwhile, operating profit at the firm was up 10% to £243.7m.
The figures included £8.7m from the disposal of Smart Buying to the firm’s joint venture with Cox Automotive.
Cash generated from operations was up 13% to £258.5m and £151.1m was returned to shareholders through £93.5m of share buy-backs.
This year Auto Trader formed a joint venture with Cox Automotive called Dealer Auction.
The new business provides a platform enabling vehicles to be bought and sold in the B2B market, through offering lower transaction costs and market-leading analytics powered by Auto Trader.
Chief executive Trevor Mather said: “We have achieved another strong year of revenue and profit growth driven by a line-up of products that are proven to improve the business performance of our retailer and manufacturer customers.
“We remain the most trusted marketplace for car buyers and offer the largest choice of both new and used cars following the recent addition of brand-new cars on Auto Trader, which are available immediately and at competitive prices.
“The new financial year has started well, and despite the continued wider market uncertainty, the board is confident of meeting its growth expectations for the year.”
Russ Mould, investment director at AJ Bell, said: “The car industry might be stalling, but vehicle listings website Auto Trader continues to motor along nicely.
“Auto Trader’s website is the one most visited by prospective car buyers because it has the most listings. Car retailers are therefore compelled to use its products, reinforcing its leading position.
“This helps explain the company’s ability to accelerate its average revenue per retailer by 9% in the 12 months to 31 March 2019.
“Earnings expansion in the medium-term is likely to be reliant on achieving further improvements here, given the volume of the cars on the site is expected to dip slightly.
“Auto Trader does expect growth on this metric going forward, although in a sign of more difficult market conditions the company indicates it may struggle to squeeze more out of car sellers at the ‘exceptional levels’ seen in the past financial year.
“In fairness it is not a case of Auto Trader simply charging a higher price for the same thing but rather of upselling retailers to a wider range of products and services. This could still be a tough ask given the challenges facing the sector.
“The company also has to contend with a change of drivers as CEO Trevor Mather hands over the keys to his finance chief, Nathan Coe at the end of the current financial year.”
