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Auto Trader’s annual turnover rose 8% to £355.1 million in 2018

Auto Trader operations director Nathan Coe

Auto Trader’s annual turnover rose 8% to £355.1 million in 2018/19 as its grew its average profit per retailer forecourt by 9% to £1,844.

The online classified advertising provider revealed the growth of its Retail Checks and Retail Accelerator platforms and its presence in the new car sales space as it shared its financial results for the period to March 31, 2019, in an investor presentation this morning (June 6).

Profit before tax rose 15% to £242.2 million (2018: £210.7m), including £8.7 million profit recognised upon the disposal of Smart Buying to new Dealer Auction joint venture partner Cox Automotive, as the amount of cash generated by its operations rose 13% to £258.5 million (2018: £228.4m).

A total of £151.1 million returned to shareholders through £93.5 million of share buy-backs (2018: £96.2m) in addition to dividends of £57.6 million (2018: £52.2m) during the period.

But, despite growing competition in the online marketing sector following the emergence of CarGurus and its acquisition of Pistonheads and ebay’s acquisition of and subsequent merger with Gumtree Motors, the supplier is making more profits from an increased number of car retailer customers.

Profit per retailer during the period rose by £149, from £1,695 to £1,844.

Chief operating officer and chief financial officer, Nathan Coe, told this morning’s investor meeting that “despite the consolidation between ebay and Motors, Cargurus and Pistonheads we’ve not seem that substantiatited by a growth in traction.”

Auto Trader stated that 75% of car buyers’ research on classified websites still happens on its platform.

“At the end of the day retailers are driven first and foremost not by audience stats, but by how many sales get driven to their dealership,” said Coe.

“The vast majority of retailers will continue to just use Auto Trader. There is no retailer that says there is any other provider that provides anything comparative to Auto Trader.”

The number of retailers using the platform rose once more to 13,240, following a decline from 13,296 to 13,213 in 2018.

Physical car stock on Auto Trader rose by 2% to 461,000 cars (2018: 453,000).

However, despite cross platform visits per month having risen by 1% to 49.1 million during the reported period (2018: 48.7 million) full-page advert views per month decreased 3% to 239 million (2018: 246 million).

Auto Trader has continued to progress its aim of providing more data solutions to retailers, the number of retailers taking advantage of the Retailer Accelerator platform which replaced iControl earlier this year, having risen to 3,200 compared from 3,000 last year, it said.

Work is still ongoing, meanwhile, to bring together and Manheim Online with Smart Buying onto a single ‘data driven alternative B2B buying and selling platform’.

While Coe said that 30,000 vehicles sold between January and March 2019 on DealerAuction, further growth is expected to be achieved once the new, integrated platform goes live in early 2020.

Auto Trader is also moving ahead with its plans to offer franchised retailers an alternative route to market with their in-stock new cars.

Its stock-based product allowing retailers to upload available product saw 30,000 cars marketed online at the end of the financial period as part of a free trial and Coe said that there was “strong appetite” for such a product.

He added, however, that “the technical and operational challenges to getting these cars online has proven to be high”.

Elsewhere, Auto Trader said that monetisation of its Dealer Finance product had achieved 70% penetration amongst eligible retailers, with over 5,000 retailers now paying to advertise their own finance offers with another 3,500 opting to show finance deals from our finance partner on their adverts.

Independent retailers have also embrace a new Vehicle Check tool, Coe revealed, with the new service - offering unlimited provenance checks - achieving a take-up of 80% among its independent customers.

In a look forward to the year ahead, Auto Trader said that it did not expect such a growth of growth as a result of new services.

A statement within its financial reulsts said: "Due to the challenges facing Manufacturers and their agencies, we expect revenue from these customers to decline in the first half of the year.

"We do not foresee any issues with Brexit affecting our ability to provide our services, or to materially change our cost base.

"We anticipate total operating costs for the year to increase at a rate of low to mid-single digit.

"The Board is confident of meeting its growth expectations for the year." 

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