Auto Trader Group has best year ever after strong revival in advertising revenue


Auto Trader Group posts best year ever after revival in car sales and rebound in advertising revenues

  • Dealerships spent an average £2,210 marketing their cars with Auto Trader 
  • Auto Trader’s revenue climbed by 65% from the previous year to £432.7m
  • SMMT: The number of cars produced by British factories declined by 11%

Auto Trader Group has achieved a record annual performance thanks to a strong rebound in car sales and much higher income from advertising.

Total revenue at the automotive marketplace for the year to 31 March climbed by 65 per cent from the previous year to £432.7million, as the recovery in demand for motor vehicles led to a surge in forecourts advertising on its platform.

These dealerships spent an average of £2,210 marketing their cars with Auto Trader, an £886 rise on the prior year when Auto Trader’s income was hit by its decision to offer free advertising during some months to retail customers.

Marketing boost: Total annual revenue at Auto Trader Group climbed by 65 per cent as the recovery in demand for motor vehicles led to a surge in forecourts advertising on its platform

Britons were also buying fewer cars as Covid-related lockdown travel restrictions discouraged them from driving and caused them to spend more time at home.

As these rules were loosened, Auto Trader saw an increase in the number of visits to its website, which averaged 63.8 million per month, giving it a share of more than three-quarters of the automotive classified market. 

This went hand-in-hand with the release of pent-up demand for new and used cars, and a rebound in advertising, even though the volume of vehicles that forecourts marketed on the group’s platform fell due to supply shortages. 

In addition, the company’s rising costs were far outpaced by the boost in advertising income, thereby helping its pre-tax profits jump by 91 per cent from the previous year to just above £300million. 

The Manchester-based firm expects average revenue per customer to continue growing during this financial year, although at a slower momentum due to weakening market conditions.

Chief executive Nathan Coe said: ‘This year marks the best financial and operational performance in our history, which is credit to our people and the partnerships we have with our customers.

Outlook: Auto Trader expects average revenue per customer to continue growing during this financial year, although at a slower momentum due to weakening market conditions

Outlook: Auto Trader expects average revenue per customer to continue growing during this financial year, although at a slower momentum due to weakening market conditions

‘We are well placed to continue growing our core business while establishing the products that retailers will need to shift more of the car buying journey online, on Auto Trader.

‘Despite the current high levels of economic uncertainty and industry change, we enter the year with good reason for both confidence and optimism.’

Shareholders received £73.6million in dividends and benefited from a further £163.5million in share buybacks after receiving no payout in the 2021 financial year.

Auto Trader’s results come as figures from the UK’s leading automotive trade association showed the number of cars produced by British factories declined by 11 per cent to 60,554 in April.

The Society of Motor Manufacturers and Traders (SMMT) blamed the downturn in production levels on the continuing shortage of microchips, supply chain troubles, and the Russian military’s full-scale invasion of Ukraine.

The organisation called on the UK Government to introduce urgent relief for the sector to deal with rising energy prices, and more long-term measures to enhance investment in skills, machinery, and research and development.

Commenting on Auto Trader’s performance, Edison Group’s director of research Neil Shah cautioned of a ‘less bright outlook’ facing the motor vehicle industry this year given the present inflationary and supply chain challenges.

He added: ‘Auto Trader will need to demonstrate continued progression of strategic aims as consumer demand may begin to fall. Nevertheless, this is a strong set of results that puts them in a solid position to face the year ahead.’

Auto Trader Group shares closed trading 2.65 per cent higher at £5.81 on Thursday, although their value has slumped by over 22 per cent in the past six months. 

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