Auto Trader Group plc (‘Auto Trader’, ‘the Group’), the UK’s largest digital automotive marketplace, announces full year results for the year ended 31 March 2018.
Financial highlights
- Revenue up 7%* to £330.1 million (2017: £311.4 million)
- Average Revenue Per Retailer forecourt1 (‘ARPR’) per month up £149 to £1,695 (2017: £1,546), driven by growth in stock, price and product
– Operating profit up 10%* to £220.6 million (2017: £203.1 million) with Operating profit margin of 67% (2017: 65%)
– Profit before tax up 10%* to £210.8 million (2017: £193.4 million)
– Basic EPS up 15%* to 17.76p per share (2017: 15.64p)
– Cash generated from operations2 up £13.2 million to £226.1 million (2017: £212.9 million)
– Net external debt3 down to £338.7 million (2017: £355.0 million) with leverage4 at 1.46x (2017: 1.65x)
– Returned £148.4 million to shareholders through £96.2 million of share buy-backs (2017: £102.1 million) plus dividends paid of £52.2 million (2017: £26.6 million)
– Proposed final dividend of 4.0 pence per share (2017: 3.5 pence per share) totalling 5.9 pence per share (2017: 5.2 pence per share)
Operational highlights
- Average physical car stock on site5 up 1% to 453,000 cars (2017: 450,000), with growth in stock per forecourt compensating for a 1% decline in average retailer forecourts to 13,213 (2017: 13,296)
- Audience engagement remains strong with cross platform minutes1,6 per month up 6% to 618 million (2017: 582 million). Full page advert views per month1,7 were consistent at 246 million (2017: 247 million)
- Re-launched our retailer advertising packages in April 2017; penetration of our Advanced and Premium tiers has been encouraging with 12% of retailer cars on site now on one of these two levels8
- Added monthly payment prices to two thirds of car stock listed and launched search by monthly payment, making it easier for consumers to shop for their next car
– Launched our new InSearch and video products helping manufacturers to target new car buyers more effectively
Trevor Mather, Chief Executive Officer of Auto Trader Group plc, said:
“This has been a strong year of revenue and profit growth for Auto Trader, driven predominately by retailer and manufacturer adoption of the new products that we launched throughout the year.
“Our market leading position has been enhanced by consumers spending more time on our site interacting with the wide range of adverts, products and advice that we offer.
“We have taken a big step in our strategy of improving car buying in the UK by launching the Dealer Finance product which allows consumers to find their next car by monthly payment and allows retailers to advertise finance on their cars earlier in the buying journey.
“Auto Trader is uniquely placed to help current customers and other automotive players adapt to the evolving automotive environment in the UK, and despite the challenging conditions for our customers in the past 12 months we have clearly seen that those who engage more closely with our products and our data are able to gain market share and improve efficiency.
“The new financial year has started well, and the Board is confident of meeting its growth expectations for the year.”
Outlook
In April, we successfully monetised our Dealer Finance product, with 69% of eligible car retailers opting to pay for this feature, and executed our annual pricing event which went well.
These events, combined with continued upsell onto higher level packages and further penetration of Managing products, will deliver higher levels of price and product ARPR growth in 2019. With fewer cars for sale in the market, we anticipate a small decline in stock, moderating ARPR growth to be below that of 2018.
We expect average retailer forecourts to decline at a similar rate to last year.
Manufacturer & Agency continues to gain market share due to our new InSearch product. We therefore expect growth to accelerate somewhat.
In the second half of the year, broader economic uncertainty impacted private listings and this is likely to continue.
We anticipate total operating costs for the year to increase at a rate of low to mid-single digit, resulting in a continued increase in Operating profit margin.
The new financial year has started well, and the Board is confident of meeting its growth expectations for the year.
Analyst presentation
A presentation for analysts will be held at the offices of Numis Securities at 9.30am, Thursday 7 June 2018. If you wish to attend, please contact Powerscourt on the details below. Alternatively, you can listen to the presentation via audio webcast at the following link:https://edge.media-server.com/m6/p/ynz9ijto