Latest news with #AutoTraderGroup
Telegraph
23-07-2025
- Automotive
- Telegraph
Auto Trader has been selling cars too quickly for its own good
The UK economy's outlook is significantly more positive than many investors realise. For example, inflation is set to gradually fall to the Bank of England's 2pc target over the next 18 months. This should allow further monetary policy easing to take place that, alongside the impact of recent interest rate cuts, boosts economic growth. Clearly, the existence of time lags following interest rate cuts, fiscal policy uncertainty and ongoing geopolitical risks could weigh on the UK economy's near-term performance, but in an era of lower inflation and an increasingly loose monetary policy, the direction of travel for the profits and share prices of UK-focused firms is highly likely to be materially upwards over the coming years. As a result, Questor continues to be bullish about the prospects for Auto Trader Group. The online automotive marketplace is well placed to benefit from an increasingly upbeat consumer outlook amid further positive real-terms wage growth, particularly as it enjoys an extremely dominant market position. In fact, it is 10 times larger than its nearest competitor, with its website home to over 75pc of every minute spent on automotive marketplaces in the UK. Furthermore, its latest annual results showed that return on equity was around 50pc. This is exceptionally high and, even more impressively, was achieved in tandem with extremely low debt levels. In fact, the firm's net debt position from 2024 reached a net cash position amounting to £15m in 2025. This means the business is capable of continuing to invest in its operations even if the aforementioned geopolitical risks come to the fore in the short run. A strong competitive position meant the company was able to further raise prices during its latest financial year. Indeed, its significant pricing power will allow it to benefit from any improvement in the operating conditions and profitability of automotive retailers as interest rates and inflation both fall. With a constant stream of new products being launched, including those that harness artificial intelligence, it seems likely that the firm will at least maintain its substantial competitive advantage in future. Of course, investor sentiment towards Auto Trader has been highly erratic of late. The firm's latest annual results prompted a sudden 11pc share price slump on the day of their release in May. Although the company posted a 12pc rise in earnings, revenue growth dropped by nine percentage points to 5pc. This was partly caused by vehicles listed on its platform selling at a faster rate than in the prior year, thereby reducing demand for the firm's advertising opportunities, which could persist for at least part of the current year. While the stock's price has only partially recovered from its slump, it has still risen by 78pc since Questor tipped the company as a 'buy' during September 2018. In doing so, it has outperformed the FTSE 100 by 61 percentage points. Despite this, the company's price-to-earnings ratio of 26 is unchanged from its level at the time of our original tip. While it is undoubtedly a generous rating compared with many other large-cap shares, even while the FTSE 100 trades close to a record high, this column believes it still represents fair value for money. The company, for example, is due to deliver annualised profit growth of 11pc over the next two years. Furthermore, its solid financial position and clear competitive advantage mean it is a high-quality business that deserves a premium rating compared with the wider index. Of course, investors should not conflate an upbeat UK economic outlook with a period of plain sailing for share prices. Even during its most bullish periods of yesteryear, the stock market has still experienced bouts of extreme volatility. Similarly, the economy's improving performance is unlikely to be smooth progress, with inflation set to prove sticky at times and interest rate cuts likely to take many months to fully impact GDP growth, wage growth and, ultimately, the operating environment for UK-focused firms. However, in Questor's view, investors who back high-quality UK-focused stocks such as Auto Trader, take a long-term view and accept elevated volatility in the short run are likely to ultimately be handsomely rewarded.
Yahoo
31-05-2025
- Automotive
- Yahoo
Auto Trader Group PLC (ATDRF) Full Year 2025 Earnings Call Highlights: Strong Revenue and ...
Group Revenue Growth: 5% increase. Operating Profit Growth: 8% increase. Basic EPS Growth: 12% increase. Core Auto Trader Revenue Growth: 7% increase. Retailer Revenue Growth: 7% increase. Average Revenue Per Retailer (ARPR): 5% increase to GBP 2,854. Cash Returned to Shareholders: GBP 275.7 million through share buybacks and dividends. Final Dividend: 7.1p per share, total dividends 10.6p per share, up 10%. Operating Profit Margin: Group margin at 63%, Auto Trader margin at 70%. Cash Generated from Operations: 5% increase. Average Number of Retailer Forecourts: Up 2% to 14,013. Live Car Stock: Up 1% to 449,000. Autorama Revenue: GBP 36.3 million. Autorama Operating Loss: GBP 4.3 million. Net Profit Before Tax: GBP 375.7 million, 9% increase. Effective Tax Rate: 25%. Net Bank Debt: Reduced to nil. Warning! GuruFocus has detected 2 Warning Sign with ATDRF. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Auto Trader Group PLC (ATDRF) reported a 5% increase in group revenue, with Auto Trader revenue specifically growing by 7%. Operating profit grew by 8%, demonstrating strong operating leverage and effective capital policy application. The company successfully launched its Co-Driver AI product suite, which has seen strong engagement from both retailers and consumers. Auto Trader's platform strategy is robust, with over 1 billion calls to data services, benefiting more than 90% of retailer customers. The Deal Builder product saw an 82% increase in customer numbers, significantly boosting the number of deals generated. The acceleration in the speed of vehicle sales negatively impacted revenue growth, which could have been higher without this factor. Used car prices fell during the year, affecting retailer profitability despite strong consumer demand. The digital services tax impacted Auto Trader's operating profit margin, which contracted slightly. Revenue from Manufacturer and Agency customers decreased by 8% year-on-year. Autorama, a segment of the business, reported an operating loss of GBP 4.3 million, although this was a reduction from the previous year. Q: With the April '26 pricing event approaching, how will Auto Trader handle accelerated stock turn, and what products will be bundled in the event? A: Nathan Coe, CEO, explained that while the event is some time away, they consider retailer profitability and stock turn when planning. They are not planning to change their business model but may consider pricing adjustments if stock turn remains fast. The event will likely focus on Deal Builder, with no major additional products, to ensure effective implementation and engagement. Q: Can you provide more details on the FY26 stock ARPR guidance and the medium-term Deal Builder monetization plans? A: Jamie Warner, CFO, stated that the stock offer conversion is expected to align with historical rates, and they anticipate a small negative impact on stock lever. Catherine Faiers, COO, noted that Deal Builder will be a baseline version initially, with potential for future monetization through additional features like finance products. Q: What are the expectations for retailer gross margins, and how does Autorama fit into the strategy with new private sales growth? A: Catherine Faiers, COO, mentioned that retailer gross margins have been under pressure due to narrowing trade-retail price gaps and softer finance penetration. Nathan Coe, CEO, added that Autorama's focus is on leveraging the Auto Trader platform for growth, with plans to reduce reliance on balance sheet transactions. Q: How does Auto Trader view competitive threats, and what differentiates its position in the market? A: Catherine Faiers, COO, emphasized that Auto Trader's brand, consumer relationships, and data depth are key differentiators. They focus on maintaining strong marketplace foundations and leveraging proprietary data to enhance consumer and retailer experiences, which positions them well against both traditional and emerging competitors. Q: With Deal Builder becoming part of core packages, will there be additional marketing efforts, and are there plans for standalone AI products? A: Catherine Faiers, COO, indicated that while they won't significantly increase marketing spend, they will enhance Deal Builder's prominence on the platform. Regarding AI, there are opportunities to develop standalone products within their existing streams, potentially targeting specific customer segments for validation and monetization. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
31-05-2025
- Automotive
- Yahoo
Auto Trader Group PLC (ATDRF) Full Year 2025 Earnings Call Highlights: Strong Revenue and ...
Group Revenue Growth: 5% increase. Operating Profit Growth: 8% increase. Basic EPS Growth: 12% increase. Core Auto Trader Revenue Growth: 7% increase. Retailer Revenue Growth: 7% increase. Average Revenue Per Retailer (ARPR): 5% increase to GBP 2,854. Cash Returned to Shareholders: GBP 275.7 million through share buybacks and dividends. Final Dividend: 7.1p per share, total dividends 10.6p per share, up 10%. Operating Profit Margin: Group margin at 63%, Auto Trader margin at 70%. Cash Generated from Operations: 5% increase. Average Number of Retailer Forecourts: Up 2% to 14,013. Live Car Stock: Up 1% to 449,000. Autorama Revenue: GBP 36.3 million. Autorama Operating Loss: GBP 4.3 million. Net Profit Before Tax: GBP 375.7 million, 9% increase. Effective Tax Rate: 25%. Net Bank Debt: Reduced to nil. Warning! GuruFocus has detected 2 Warning Sign with ATDRF. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Auto Trader Group PLC (ATDRF) reported a 5% increase in group revenue, with Auto Trader revenue specifically growing by 7%. Operating profit grew by 8%, demonstrating strong operating leverage and effective capital policy application. The company successfully launched its Co-Driver AI product suite, which has seen strong engagement from both retailers and consumers. Auto Trader's platform strategy is robust, with over 1 billion calls to data services, benefiting more than 90% of retailer customers. The Deal Builder product saw an 82% increase in customer numbers, significantly boosting the number of deals generated. The acceleration in the speed of vehicle sales negatively impacted revenue growth, which could have been higher without this factor. Used car prices fell during the year, affecting retailer profitability despite strong consumer demand. The digital services tax impacted Auto Trader's operating profit margin, which contracted slightly. Revenue from Manufacturer and Agency customers decreased by 8% year-on-year. Autorama, a segment of the business, reported an operating loss of GBP 4.3 million, although this was a reduction from the previous year. Q: With the April '26 pricing event approaching, how will Auto Trader handle accelerated stock turn, and what products will be bundled in the event? A: Nathan Coe, CEO, explained that while the event is some time away, they consider retailer profitability and stock turn when planning. They are not planning to change their business model but may consider pricing adjustments if stock turn remains fast. The event will likely focus on Deal Builder, with no major additional products, to ensure effective implementation and engagement. Q: Can you provide more details on the FY26 stock ARPR guidance and the medium-term Deal Builder monetization plans? A: Jamie Warner, CFO, stated that the stock offer conversion is expected to align with historical rates, and they anticipate a small negative impact on stock lever. Catherine Faiers, COO, noted that Deal Builder will be a baseline version initially, with potential for future monetization through additional features like finance products. Q: What are the expectations for retailer gross margins, and how does Autorama fit into the strategy with new private sales growth? A: Catherine Faiers, COO, mentioned that retailer gross margins have been under pressure due to narrowing trade-retail price gaps and softer finance penetration. Nathan Coe, CEO, added that Autorama's focus is on leveraging the Auto Trader platform for growth, with plans to reduce reliance on balance sheet transactions. Q: How does Auto Trader view competitive threats, and what differentiates its position in the market? A: Catherine Faiers, COO, emphasized that Auto Trader's brand, consumer relationships, and data depth are key differentiators. They focus on maintaining strong marketplace foundations and leveraging proprietary data to enhance consumer and retailer experiences, which positions them well against both traditional and emerging competitors. Q: With Deal Builder becoming part of core packages, will there be additional marketing efforts, and are there plans for standalone AI products? A: Catherine Faiers, COO, indicated that while they won't significantly increase marketing spend, they will enhance Deal Builder's prominence on the platform. Regarding AI, there are opportunities to develop standalone products within their existing streams, potentially targeting specific customer segments for validation and monetization. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
31-05-2025
- Business
- Yahoo
Auto Trader Group Full Year 2025 Earnings: In Line With Expectations
Revenue: UK£601.1m (up 5.3% from FY 2024). Net income: UK£282.6m (up 10.0% from FY 2024). Profit margin: 47% (up from 45% in FY 2024). The increase in margin was driven by higher revenue. EPS: UK£0.32 (up from UK£0.28 in FY 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) was also in line with analyst expectations. Looking ahead, revenue is forecast to grow 6.3% p.a. on average during the next 3 years, compared to a 8.2% growth forecast for the Interactive Media and Services industry in the United Kingdom. Performance of the British Interactive Media and Services industry. The company's shares are down 13% from a week ago. While earnings are important, another area to consider is the balance sheet. See our latest analysis on Auto Trader Group's balance sheet health. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31-05-2025
- Business
- Yahoo
Auto Trader Group Full Year 2025 Earnings: In Line With Expectations
Revenue: UK£601.1m (up 5.3% from FY 2024). Net income: UK£282.6m (up 10.0% from FY 2024). Profit margin: 47% (up from 45% in FY 2024). The increase in margin was driven by higher revenue. EPS: UK£0.32 (up from UK£0.28 in FY 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) was also in line with analyst expectations. Looking ahead, revenue is forecast to grow 6.3% p.a. on average during the next 3 years, compared to a 8.2% growth forecast for the Interactive Media and Services industry in the United Kingdom. Performance of the British Interactive Media and Services industry. The company's shares are down 13% from a week ago. While earnings are important, another area to consider is the balance sheet. See our latest analysis on Auto Trader Group's balance sheet health. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
