Auto Trader sees solid H1 growth but outlook mixed

The online marketplace saw a 10% fall in first-half new car volumes, which declined compared with already depressed levels seen last year despite an increase in discounts being offered by manufacturers.

Meanwhile, while demand for used cars has been strong with cars selling fast – Auto Trader noted a record number of cross-platform visits in the first half – supply constraints have emerged. Due to the cars being advertised for shorter periods of time, this has not corresponded with an increase in live adverts so has not directly benefited revenue, the company said.

Group revenues increased by 8% year-on-year to £302.5m in the six months to 30 September.

While the number of retailer forecasts rose 2%, growth was smaller lower yielding retailers meaning that average revenue per retailer rose by a lesser 6.3%.

Adjusted EBITDA increased 8% to £196.9m, with basic earnings per share rising 22% to 15.56p, helping the company to declare an interim dividdnd of 3.5p per share, up from 3.2p a year earlier.

Looking ahead, Auto Trader predicted that retailer forecourts are likely to remain strong and be broadly consistent with the first half, but said: "As this increase came from smaller lower yielding retailers, the growth in both the price and product levers was diluted, which we also expect to continue. Compared to our original outlook, the impact on revenue from having more retailers but with lower price and product contribution should broadly cancel each other out."