Home » Auto Trader – Revenue and profit beat paving a smoother road for H2
Auto Trader’s revenue rose 16% to £249.8m. Excluding the Autorama acquisition, revenue was up 11%. Customer numbers and product uptake have been better than expected. Average Revenue Per Retailer (ARPR) per month rose £205 to £2,404. That reflects increased prices, and the adoption of new products, with the latter contributing £133 to the increase.
The average number of car retail forecourts, which are important customers for Auto Trader, rose 2% to 14,161. Physical car stock on site rose 1% but new car listings fell to 22,000 from 39,000.
Underlying operating profit rose 11% to £168.8m, with revenue growth offsetting higher costs. Auto Trader had an operating margin of 71%, but this was 61% including Autorama.
The group generated free cash flow of £132.1m, and had net debt of £56.3m.
Looking ahead, Auto Trader expects margins to be maintained at 70% in the second half. Retailer forecourt numbers are still expected to dip slightly, but ARPR is predicted to increase.
An interim dividend of 2.8p was announced, and the group continues to prioritise its share buyback programme.
Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown:
“Auto Trader is accelerating into the second half with excellent momentum. Performance in the first half saw revenues and profits come in better than expected, which is a function of Auto Trader’s enviable recurring revenue, strong pricing power and highly profitable model. Running a website doesn’t cost a lot, after all. Underlying operating margins north of 70%, with strong conviction that these can be maintained, are an asset very hard to find in the current environment.
The group’s plan to digitise the car buying journey, from selection to leases and payments, have real merit. As Auto Trader looks for growth levers to pull, this is an admirable on. As market share goes in the car retail business, Auto Trader is rapidly bumping up against the side of the tank, so alternative plans for growth are needed. While progress and ambitions can’t be knocked, it’s highly likely those strengths are already reflected in the share price.”