8:10 am, June 1, 2023
Auto Trader saw its group pre-tax profit take a dip last year, dropping beneath £300m.
Its results for the year ended March 31, 2023, which were released this morning via the London Stock Exchange, show it made £293.6m versus £301.0m the year before.
However, bosses still regarded it as a successful year, with the online marketplace highlighting a ‘constrained new and used vehicle supply’.
The Auto Trader group enjoyed a 16 per cent increase in revenue from £432.7m to £500.2m. This comprised £473m for Auto Trader and £27.2m for its newly acquired Autorama car leasing platform, which it bought in 2022.
Auto Trader’s trade revenue grew by 10 per cent to £427.4m.
Its operating profit margin stayed the same at 70 per cent, although the group operating profit margin fell by 15 percentage points to 55 per cent, with group central costs taking a £44.1m hit relating to its acquisition of the Autorama car leasing service.
It delivered 6,895 new vehicles under lease agreements, at an average yield of £1,624.
Adjusted EBITDA for the group rose by seven per cent to £328m.
Auto Trader’s operating profit, meanwhile, rose by 10 per cent to £332.9m.
Speaking exclusively to Car Dealer, chief operating officer Catherine Faiers addressed the two per cent pre-tax profit fall by saying: ‘Our costs are up a bit, but I guess everyone’s are.
‘There’s inflation, of course, and we continue to invest in products and technology because we don’t want to stop innovating in bringing new solutions to the industry.
‘The biggest driver [for the drop in profit before tax] specifically for this year is the acquisition of Autorama. Obviously, we had to pay the acquisition price and then the business itself.
‘When we acquired it, Autorama was loss-making and there are market dynamics too – supply is coming back a bit but it’s still pretty depressed, and [Autorama] has business with the van and pick-up segments [which has also been depressed].
‘So, there’s a combination of Auto Trader costs, acquisition costs and ongoing losses in Autorama which we are working hard to turn around.’
The average number of car dealer forecourts advertising on its platform was down slightly at 13,913, versus 2022’s figure of 13,964, although it said numbers were actually up by one per cent after adjusting for offloading Webzone Ltd last October.
Auto Trader CEO Nathan Coe has hailed ‘another strong financial and operational performance’
It said the number of UK forecourts continued to be at record levels, with over 800 more car dealers paying to advertise with it than before the pandemic.
Cross-platform visits were up by one per cent to 69.6m per month but cross-platform minutes fell by eight per cent to 513.6m minutes per month.
However, Auto Trader said visits and minutes were still significantly up versus pre-pandemic levels – 24 per cent and 16 per cent respectively versus 2020.
It said it made an average of £2,437 per dealer per month – up by £227 or 10 per cent – which was driven by both price and product levers.
Physical car stock on the site was up by two per cent at 437,000 cars on average, although its listings for new cars fell by 14 per cent from 29,000 to 25,000 on average.
Chief executive Nathan Coe said: ‘This year marks another strong financial and operational performance for Auto Trader.
‘Given the challenging economic backdrop and historically low levels of vehicle supply, these results are a credit to our people and the close partnerships we’ve developed with our customers.
‘The prospects for our marketplace are as strong as they have ever been, underpinned by the significant number of car buyers and retailers using Auto Trader.’
He added: ‘We have also made good progress on improving the new and used car-buying experience by moving more of the journey online, on Auto Trader.
‘As a result, despite continued economic uncertainty and automotive industry changes, we feel confident about the year ahead.’
Faiers also hailed the results while speaking to us, saying: ‘I think they are a good set of results. They reflect the fact that the core marketplace continues to continue to grow.
‘We’ve got 800 more retailers partnering with us than before the pandemic, and we’ve had 24 per cent more visits to our platform.
‘So, we’ve got more car buyers than before and more retailers than ever before choosing to either use Auto Trader or to partner with us.
‘With that backdrop, we’ve been able to drive good product uptake from retailers – we’ve got more retailers buying our prominence packages, choosing to be more visible, and trying to gain share on our platform.
‘We’ve got more retailers on our market extension package – which is the package where you can conquest into other areas of the UK, you can boost the region that your cars are visible in.
‘We’ve got more retailers on our new car products and high penetration of our data products, so a lot of the growth is driven by more retailers choosing to buy our products.’
