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Auto Trader dips on interims

The online car retailer is struggling to generate enthusiasm for the shares amidst a difficult motor market
November 9, 2017

Poor motor industry data is weighing hard on Auto Trader (AUTO). Even a decent set of half-year results, in which the group hit most of its targets, wasn’t enough to shore up the share price, which fell back as confidence in the wider sector continues to deteriorate.

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Adjusted pre-tax profits and EPS of £105.4m and 8.7p, respectively, compared with brokerage Numis’ estimates of £105m and 8.6p, although management has upped its guidance for growth in average revenue per retailer from £130 to £140 this year following a 10 per cent improvement in this metric to £1,674 during the period. It’s hoped this will be sufficient to offset tighter advertising and consumer revenues this year, with costs expected to rise around 2 per cent following the acquisition of Macclesfield-based Motor Trade Delivery in April.

Analysts at Numis expect pre-tax profits of £213m for the March 2018 year-end, giving EPS of 17.6p, compared to £193m and 15.6p in FY2017.