7:35 am, November 10, 2022
Auto Trader clocked up an operating profit of £149.1m for the first half of 2022, filings with the Stock Market reveal today.
The online used car marketplace generated revenues of £249.8m – up 16 per cent – in the six month period as it reveals for the first time the impact of its acquisition of Autorama.
The leasing business which Auto Trader bought in March for £200m generated revenue of £11.6m, but made a loss of £4m in the period.
Other ‘group central costs’ weighed on the firm’s profitability for the period, dragging down its overall profitability by 2 per cent compared to the same period last year.
Its operating margin also fell 10 per cent – down from 70 per cent in the same period last year to 60 per cent this year.
Auto Trader says this is down to a deferred Autorama charge for the period of £13.8m which was included in its costs. Without it, profit would have been up seven per cent.
Auto Trader CEO Nathan Coe said: ‘Our first half results demonstrate the strength of our position with car buyers and the depth of partnership we are building with customers.
‘Achieving this in a period impacted by high levels of economic uncertainty is a credit to both our people and customers, and provides confidence in navigating the rest of the year.
‘Longer-term we are well placed to grow as we further develop the core Auto Trader business, extend it to enable car buyers to complete more of their purchase online, and provide the industry-leading data and technology platform for our customers.’
The Stock Market filings show car dealers made up the majority of the firms’ income for the period with £214.3m attributed to the trade. Consumer advertising generated just £18.7m by comparison.
Manufacturers and agencies spent £5.2m with the business.
Auto Trader said it had returned £82.3m to shareholders through £30.6m of share buy-backs and dividends paid of £51.7m so far this year.
Shares in Auto Trader dropped five per cent in the first hour of trading today down to 524p.
Visits to the firm’s marketplace across its platform were down 10 per cent in the period – which covers the six months to the end of September – at 67.7m with the amount of time users spent on the site dropping too by 14 per cent.
The number of car dealers using the platform rose two per cent, though – some 14,161 car dealers now advertise their stock on Auto Trader.
The number of cars advertised on the site was up marginally too – by one per cent – at 440,000 cars on average in the period. However, new car listings declined from 39,000 last year to just 22,000 this year.
Looking ahead to the second half of its year, Auto Trader said trading had been ‘consistent’ in October.
The firm added: ‘Auto Trader’s operating profit margin for the full year is expected to be in line with financial year 2022.
‘Autorama is likely to make an operating loss of c.£11m for the full year, with continued supply challenges across all vehicle types resulting in lower delivery volumes. Group central costs will be c.£45m, largely made up of the Autorama deferred consideration.
‘The outlook for future years is necessarily more uncertain, however the used car market is far less cyclical than the new car market and new car registrations are expected to recover, currently being at their lowest level in 30 years.
‘We believe that there are significant opportunities for Auto Trader to grow revenue at high margins through our price and product levers and will continue to bring more of the car buying journey online through Deal Builder and Autorama.’
Earlier this year, Car Dealer produced a special investigation video looking at how Auto Trader got so big. You can see what car dealers think and hear from the marketplace in the video at the top of this post.
