– Revenue up 7% to £165.0 million (H1 2017: £153.9 million)
– Operating profit up 9% to £109.6 million (H1 2017: £100.6 million)
– Profit before tax up 10% to £105.4 million (H1 2017: £95.5 million)
– Cash generated from operations1 up 11% to £114.2 million (H1 2017: £103.2 million)
– Basic EPS up 14% to 8.72p per share (H1 2017: 7.65p)
– Net external debt2 down to £347.2 million (March 2017: £355.0 million) with leverage3 at 1.55x (March 2017: 1.65x)
– Returned £70.3 million to shareholders through £36.3 million of share buy-backs (H1 2017: £48.6 million) plus dividends paid of £34.0 million (H1 2017: £nil)
– Interim dividend of 1.9p per share (H1 2017: 1.7p per share)
– Operating cost4 growth of 4%, of which 2% relates to Motor Trade Delivery (‘MTD’) acquired in April 2017, resulting in operating profit margin of 66% (H1 2017: 65%)
– Average Revenue Per Retailer forecourt (‘ARPR’) per month5 up £148 to £1,674 (H1 2017: £1,526), driven by growth in stock, Autotrader prices and product
- Physical car stock6 on site up 3% to 451,000 cars (H1 2017: 439,000), with growth in stock per forecourt offset by a 1% decline in average retailer forecourts5 to 13,213 (H1 2017: 13,374). The number of forecourts7was flat between March and September 2017
- Audience engagement remains strong with cross platform minutes5,8 per month up 1% to 594 million (H1 2017: 587 million). Full page advert views per month5,9 were down 2% to 245 million (H1 2017: 250 million)
- Re-launched our retailer advertising packages in April; early take-up of our new Advanced and Premium tiers has been encouraging with 8% of retailer stock now on one of these two tiers
– Continued to develop our new car proposition for manufacturers, retailers and consumers alike, including the launch of our new In-Search product helping manufacturers to target car buyers more effectively
Trevor Mather, Chief Executive Officer of Auto Trader Group plc, said:
“We have delivered good growth in the first half, as we continue to create a more efficient marketplace for car buyers, manufacturers and retailers. Our business has continued to perform strongly, underpinned by the successful launch of our retailer advertising packages in April. The new packages provide additional products for all customers and offer new opportunities for retailers looking to compete more effectively on the marketplace.
“The results highlight the resilience of our business considering the slowdown in new car transactions and a flat used car market. We will continue to benefit from the increased focus retailers are putting on the larger opportunity they see in used cars, where we are the clear market leader.
“We remain focused on improving the car buying and selling experience for consumers, who can now benefit from our free valuations and finance tools, thousands of dealer and car reviews, and will soon be able to search for their next car based on monthly finance payments.
“The Board is confident of delivering its growth expectations for the remainder of the year.”
Our Trade business (representing over 80% of revenues) continues to perform well. We now expect ARPR improvement to be at or above £140pcm for the year, ahead of our £130pcm target, with product being the largest contributor to ARPR growth. This means that ARPR for the year will grow further to be at or above £1,686pcm. We expect retailer forecourt numbers to remain stable and stock to grow modestly.
In our smaller revenue lines, our Manufacturer & Agency business will continue to grow market share, however due to the current downturn in the advertising market, the revenue growth rate for the year as a whole is expected to be lower than the growth rate for H1. Consumer Services revenue is set to decline modestly for the year, in line with recent performance.
We expect total operating costs for the year to increase at a rate of mid-single digit, of which Motor Trade Delivery contributes approximately 2%, and that operating margins will be higher than last year.
Capital allocation policy is unchanged with c.1/3 of full year net income to be paid as dividends. The majority of surplus cash is expected to be used to buy back shares. Our leverage ratio should continue to fall as a result of the growth in operating profit and modest further debt repayments.