City round-up: Auto Trader; DSW Capital; GRV Media

Auto Trader, the Manchester-based online car dealership group, drove up revenues and profits in the six months to September 30, 2024, it revealed today (November 7).

Revenues rose eight per cent to £302.5m, while pre-tax profits jumped 15% to £187.5m. The interim dividend has increased by nine per cent to 3.5p per share.

The group also returned £122.2m to shareholders (H1 2024: £117.1m) through £64.9m of share buybacks and dividends of £57.3m.

The group said over the past six months its marketplace and competitive position have continued to strengthen. Cross-platform visits have grown seven per cent and it is now more than 10 times larger than its nearest competitor.

It also said that the new car retail market remains challenging, with a 10% decrease in H1 volumes on depressed levels seen in the prior year, despite an increase in discounts being offered by manufacturers.

Total registration volumes were broadly flat, with the fall in retail volumes being offset by growth in the fleet segment.

Since January, the share of battery electric vehicles as a percentage of total car sales increased to 18%, although it remains short of the 22% target required under the Zero Emission Vehicle (ZEV) mandate for calendar year 2024.

Despite this weakness in the new car market, Auto Trader said it continues to see strong levels of demand for used cars, with a record number of cross-platform visits in the first half.

As the group moved through H1, supply constraints have emerged, limiting vehicle availability. This combination of high demand and restricted supply has led to cars selling at an increasingly faster rate.

CEO, Nathan Coe, said: “Our strong results for the first half of this year reflect the record numbers of customers choosing to partner with us to retail vehicles and drive the performance of their businesses.

“We are pleased with the progress of Deal Builder, which allows car buyers to secure their vehicle on Auto Trader and to complete more of the buying journey online. We have also recently launched Co-Driver, a new suite of AI-powered tools which significantly improves the automotive retailing experience for consumers and retailers alike.”

He added: “We are confident in the outlook for the business given our strong market position, and the opportunity to use our unique data, technology and AI capabilities to improve the way vehicles are retailed in the UK.”

Looking ahead, the group said retailer forecourts are likely to remain strong and be broadly consistent with that reported in the first half.

As this increase came from smaller lower yielding retailers, the growth in both the price and product levers was diluted, which the business also expects to continue. Compared to the original outlook, the impact on revenue from having more retailers but with lower price and product contribution should broadly cancel each other out.

Previous guidance on other revenue lines, Autorama losses, Auto Trader and Group operating profit margins and capital allocation policy remains broadly unchanged.

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James Dow

Daresbury-based DSW Capital, the mid-market, challenger professional services licence network and owner of the Dow Schofield Watts brand, raised its forecasts for 2025 in a trading update this morning.

It said the group’s results, which are typically weighted towards the second half of the financial year due to the recognition of profit share income, will benefit both from the contribution of DR Solicitors and the exceptional M&A performance in October 2024, which delivered increased deal volumes and deal values.

As a result, the board is expecting FY25 consolidated network revenue to be c.£23m (FY24: £16m), leading to total income of c.£4.7m (FY24: £2.4m) and Adjusted Pre-Tax Profit of c.£1.45m (FY24: £0.5m).

Cash at September 30, 2024, was in line with management expectation at £2.3m (September 30, 2023: £2.8m), reflecting the dividend payment of £0.2m and breakout incentives paid to new partners of £0.3m.

The board remains committed to its progressive dividend policy, it said.

The group said it entered fiscal year 2025 with a record number of Fee Earners and Partners, ensuring it was well positioned to benefit from an uptick in market activity.

Its licensees continued to show their resilience to achieve results in line with expectations, despite lower levels of M&A activity which gradually started to improve across the period before gaining momentum in September. 

Network revenue in H1 FY25 was £7.8m (H1 FY24: £7.3m), resulting in total income from licensees in the period of £1.1m (H1 FY24: £1.1m) and Adjusted Pre-Tax Profit of £0.1m (H1 FY24: £0.2m).

CEO, James Dow, said: “Firstly, on behalf of the board, I must congratulate and thank everyone for their contribution and resilience since October 2021 and for the truly outstanding performance they delivered in October 2024.

“We are delivering on our stated strategy to diversify, with the acquisition of DR Solicitors demonstrating our ability to attract new service lines to the group, as well as reducing our reliance on M&A significantly (from 67% of revenue to about a third).”

He added: “While we are delighted to upgrade our guidance for FY25, and the board is confident in the mid to long term prospects for the group, we are mindful of macro-economic and political uncertainties that may impact M&A activity. 

“With increasing M&A activity, the recruitment market has tightened, but opportunities across DSW and DR remain strong, and we look forward to updating the market further, as the year progresses.”

Half year results for the period ended September 30, 2024, will be released on November 25, 2024.

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Bath-based digital media business, Digitalbox, has acquired certain online assets, including all associated intellectual property, of Widnes-based GRV Media, for an undisclosed sum.

Digitalbox is a mobile-first digital media business, which owns leading websites Entertainment Daily, The Daily Mash, The Poke, The Tab, TV Guide, and Emmerdale Insider.

The acquisition includes three online assets of GRV, including CelebrityTidbit.com, RealityTidbit.com, and TheFocus.news, and the transfer to Digitalbox of eight GRV staff who are attached to the websites being acquired. The sites all operate an audience-led, advertising-focused media model in common with Digitalbox.

A three month transitional services agreement with GRV comes into effect from today (November 7) to support the integration process.

Digitalbox said adding these websites to its growing portfolio of assets will accelerate its ‘Verticals Strategy’. The strategy is to deliver highly targeted sites, based around the group’s core competence, entertainment, that benefit from fan bases delivering the kind of ‘super engagement’ increasingly favoured by platforms, like Google and Facebook.

In August 2024, the strategy started with the launch of Emmerdale Insider, with further launches and acquisitions planned.

The acquired sites have complementary positioning with Digitalbox brands, The Tab, and Entertainment Daily. During the integration process, Digitalbox will align its content archives and editorial operations with each of these, while migrating them to the Digitalbox platform, monetised by the Graphene Ad Stack.

In the 12 months to September 30, 2024, the assets being acquired generated revenue less than three per cent of Digitalbox’s revenue to December 31, 2023. 

James Carter, CEO, Digitalbox, said: “GRV is a business we have admired for some time, and we are delighted to reach this agreement. The sites and highly skilled staff will help us expand, as we establish our position as an entertainment powerhouse.” 

Vic Daniels, Executive Chairman, GRV, said: “As GRV Media has become more focused on sports coverage in recent years, we have been looking to find a good home for our entertainment properties. I have known James and Digitalbox for several years, and I know that we share the same values towards our people and brands.

“I look forward to seeing these websites thrive under their new ownership.”