Auto Trader’s growth rate exceeds forecasts amid supply chain challenges

Auto Trader delivered growth last year that exceeded forecasts, despite ongoing supply shortages that significantly impacted the volume of vehicles available for sale.

Online marketplace revenue rose 16 percent to £500.2 million for the 12 months ended March, with core business revenue up 9 percent.

Record numbers of customers in the UK helped the Manchester-based group sell cars at its fastest pace since listing on the London Stock Exchange in 2015.

As in the previous year, more than 75 per cent of the minutes consumers spent on car section sites in the UK were spent on Auto Trader – seven times more than its nearest rival.

The UK automotive sector also continued to be impacted by semiconductor shortages that began during the Covid-19 pandemic as demand soared.

As a result, the number of new car listings on Auto Trader’s platform fell from an average of 29,000 to 25,000.

The company’s average sales per service station still grew by 10 per cent to £2,437, thanks to price increases and customers purchasing more premium products.

But because of the cost of acquiring Autorama, a car leasing marketplace and the owner of Vanarama, Auto Trader’s operating profit fell 9 percent to £277.6 million.

Nathan Coe, chief executive of Auto Trader, said: “Given the challenging economic environment and historically low vehicle supply, these results are a credit to our people and the close partnerships we have developed with our customers.

“The outlook for our market is as strong as it’s ever been, supported by the large number of car buyers and retailers using Auto Trader.”

The group said the new year has started well and its near-term focus is on “significantly reducing” operating losses in Autorama by further integrating it into the Auto Trader business and keeping costs under control.

It also expects a slight decrease in the number of car dealerships in the coming year due to the sale of its Webzone business.

The numbers came as it appointed former CEO of Tesco UK and Ireland and Pets at Home boss Matt Davies as its new chairman to replace Ed Williams when he steps down in 2024.

Adam Vettese, an analyst at eToro, said: “Looking ahead, while supply remains tight, new and used car sales are improving post-pandemic, although it remains to be seen whether the general tightening of household belts will affect sales .

The big question on the lips of shareholders will be how Auto Trader plans to bypass Autorama and become one of the leading players in the leasing space. If it can do that, it will strengthen its already enviable position in the market.’

Auto Trader Stocks were 1.3 percent lower on Thursday morning at 621.8 pence, placing them among the top ten fallers on the FTSE 100 Index.