A “dramatic” shift to buying cars online during pandemic lockdowns helped Auto Trader limit full-year losses and reinstate its dividend.
The company on Thursday reported a 37% fall in pre-tax profit to £157.4m for the 12 months to March 31. Operating profit was down 38% to £161.2m.
Revenue declined 29% to £262.8m, mainly due to four months of free advertising in April, May, December of 2020 and February this year and a discounted rate last June as car dealerships were forced to close their doors when restrictions were imposed.
A dividend of 5p a share was declared. In the year ahead, Auto Trader said it expected to deliver high single digit growth on full-year 2020 average revenue per retailer and operating profit margins in line with 2020 levels.
Despite “unusually strong demand and tight supply”, the Covid-19 pandemic was having little impact on the financial performance of the business as it started financial year 2022, the company said.
“However, as seen in other countries, there can be no certainty that Covid-19 will not reappear as a significant negative factor in the group’s future performance.”
Average monthly cross platform visits increased 15% to 58.3m a month. Engagement, measured by total minutes spent on Auto Trader’s website, increased by 14% to an average of 561m minutes per month.
The group held net cash of £15.7m at year-end after raising £182.9m in April 2020.
“Retailer numbers for the year are likely to be in line with full-year 2020 levels and stock is still expected to be a small headwind,” the company said.
It added that consumer services and manufacturer & agency revenue, which make up 14% of group revenue, will recover from full-year 2021 lows, but was unlikely to reach 2020 levels, as sellers favour part-exchange and new car advertising was impacted by semiconductor supply issues.
“There has been a dramatic shift towards buying online which means we now have more buyers than ever turning to Auto Trader to help with their next car purchase, making us even more relevant to retailers and manufacturers,” said chief executive Nathan Coe.
“This positions us ideally to enable the buying and selling of cars online, which will materially improve the car buying experience and the business of our customers.”
