Numis raises target price and reiterates 'buy' on Auto Trader

Numis raised its target price on Auto Trader to 495p from 439p and reiterated a ‘buy’ rating on the stock after the company reported its first full year results as a listed company.

The online car sales firm posted a £155m pre-tax profit, up from £10.8m the previous year on Thursday. Revenues rose 10% to £281.6m, while operating profits grew 27% to £169.6m. Basic earnings per share from continuing operations of were up to 12.67p from 0.85p.

The company proposed final dividend of 1p per share, totalling 1.5p per share for the year and said a rolling programme of share buy-backs would start “imminently”, with the majority of surplus cash after dividends being returned to shareholders.

Numis had expected pre-tax profits of £154m and revenue of £279.2m.

“Auto Trader reported strong finals, that were ahead of our expectations on all metrics,” according to analysts Paul Richards and Gareth Davies.

“We continue to forecast robust medium-term growth, underpinned by encouraging industry fundamentals.”

Numis raised its fiscal year 2017 pre-tax profit and earnings per share forecasts from £175.0m and 14.0p to £182.5m and 14.8p, respectively.

Shares fell 1.30% to 418.60p at 1015 BST.