MARKET REPORT: Auto Trader in reverse after car supply dries up

Online car dealership Auto Trader sank into the red after taking a hit from a shortage of new engines in the industry.

The FTSE 100 group said Autorama, the car leasing company it bought in June last year, was hit by supply problems in the pickup and van markets.

The platform posted a loss of £11.2m in the year to the end of March and revenue of £27.2m, below market expectations.

Rising demand has seen it sell cars at its fastest pace since it entered the London stock market in 2015.

But this weighed on the number of vehicles listed on the blue-chip company’s website. Sales were up 16 per cent to £500.2 million, driven by higher sales in core market activities. But profits fell 2 percent to £293.6 million.

Auto Trader added that UK new car registrations of 1.7 million were 3 per cent higher than the year before, but were still 19 per cent lower than before the pandemic amid supply constraints. Shares fell 3.4 percent, or 21.4 pence, to 608.6 pence. Russ Mould, investment director at AJ Bell, said: ‘The Auto Trader website is the most visited by potential car buyers because it has the most listings.

“Car retailers are therefore forced to use its products, which strengthens its leading position.”

London stocks started June on a positive note, with the FTSE 100 rising 0.6 percent, or 44.13 points, to 7490.27, while the FTSE 250 rose 0.6 percent, or 104.86 points, to 18,827.76.

Miners made gains thanks to higher metal prices.

Fresnillo added 4.5 percent, or 29.2p, to 677.2p, Antofagasta rose 3.2 percent, or 42.5p, to 1380p, and Rio Tinto climbed 2.2 percent, or 104p, to 4886p.

B&M rose 3.8 percent, or 19.6 pence, to 529.4 pence on a hat-trick of broker upgrades, a day after the discount retailer forecast higher profits for next year.

Similarly, WH Smith received a vote of confidence from the city following the positive update on Wednesday as Barclays raised the retailer’s target price from 2010p to 2035p. Shares rose 1.7 percent, or 26p, to 1596p.

There was also good news for Convatec when Morgan Stanley upped its rating for the company, which makes high-tech bandages and wound dressings, from ‘equal weight’ to ‘overweight’ and raised the target price by 15 pence.

Shares gained 3.1 percent, or 6.2p, to close at 209p.

The boss of ITM Power praised the speed with which his green energy company has reined in spending. Dennis Schulz, who took over last December, unveiled a 12-month plan in early 2023 to slow cash consumption and expand facilities.

It came as results for the year to the end of April were likely to see revenue in excess of the £2 million analysts had projected, losses in line with forecasts and £281 million in cash, almost £30 million more than expected.

ITM Power shares fell 1 percent, or 0.68p, to 68.56p.

Fuel cell developer Ceres Power says it hopes to gain more exposure and access to international investors by moving its shares from AIM to the main market of the London Stock Exchange.

The group, which joined AIM in 2004, expects to enter the mid-cap level in September.

Shares rose 5.7p, or 15.8p, to 294.4p.

The bidding war for the payments company Network International will spill over into next week after the FTSE 250 company extended the deadline for submitting formal bids from yesterday to June 9.

A consortium of CVC and Francisco Partners offered 387 pence per share, while Canadian giant Brookfield Asset Management offered 400 pence per share, or £2.1 billion.

The network’s stock dropped 1.6p or 6p to 360p.