Vehicle business Auto Trader was the FTSE 100’s biggest gainer in Thursday following the release of strong first-half trading numbers.
At 684.8p, the Auto Trader share price was 7.8% higher on the day.
During the six months to September the company grew revenues 12% to £280.5 million, with sales at its core Auto Trader division rising 9% during the period to £259.4 million.
At Autorama — the US vehicle leasing unit that it acquired in 2022 — turnover soared 82% year on year, to £21.1 million.
The business said that “the used car market continues to be resilient,” adding that vehicles advertised on its UK online platform continue to sell faster than they were prior to the pandemic.
It added that “the volume of buyers on Auto Trader is at record levels, supported by stable consumer sentiment towards car buying and the continued availability of finance.
Supply issues have also eased thanks to the improving new car market, it noted, while it commented that the prices of pre-owned vehicles have remained “robust.”
Operating profit at Auto Trader rose 10%, to £184.9 million, but operating losses at Autorama rose 40% to £5.6 million. The firm also booked £14.7m worth of costs related to the purchase of its US unit.
At group level, operating profit increased 10% year on year, to £164.6 million. It lifted the half-year dividend 14% year on year to 3.2p per share.
Auto Trader is benefitting from a buoyant used car market in the UK. According to latest Society of Motor Manufacturers and Traders data, sales of pre-owned vehicles rose 4.1% during the second quarter of 2023.
Auto Trader is the dominant player when it comes to advertising used automobiles. More than 75% of all minutes spent on automotive classified sites were spent on Auto Trader during between April and September. This was in line with the previous year.
The average revenue the firm achieved per retailer, meanwhile, rose 12% in the first half. Auto Trader attributed this to “continued strong adoption of our additional products and services and a successful annual pricing and product event in April 2023.”
Chief executive Nathan Coe said that “it has been a strong start to the year with more buyers spending more time and completing more of their car buying journey on Auto Trader.”
He added that “we are working in partnership with record numbers of retailers and manufacturers, who are turning to our platform as the most effective and efficient way to source, price and sell their vehicles.”
Looking ahead, the company said that it expects “another good year of retailer revenue growth,” a key segment for its Auto Trader division.
It added that “the other smaller revenue areas within the main Auto Trader business are likely to see mid-single to low double-digit growth.” Operating profit margins at the core unit are expected to be in line with the 71% achieved during the first half.