There are conflicting messages in the UK auto market, with a 2.9 per cent fall in October new car sales reported by the Society of Motor Manufacturers and Traders, set against wider industry trends relating to improved aftersales and used car sales growth. With new car sales, it’s partly a supply issue, specifically a shortage of vehicles due to new emissions regulations – but the industry is still hobbled by the fallout from the Volkswagen diesel scandal.
Against this backdrop, Auto Trader (AUTO) has delivered a 10 per cent increase in half-year operating profit to £121m, on the back of strengthening uptake of new advertising packages and a 160 basis point improvement in the underlying margin. The digital auto marketplace has shrugged off any Brexit-linked anxieties, while the anticipated 3 per cent fall in physical car stock on site was mitigated by a 9 per cent rise in average revenue per dealer forecourt. The industry is faced by an extended period of structural change, but Auto Trader has adapted by upgrading its advertising proposition, evidenced by a 70 per cent uptake of its new Dealer Finance product among eligible retailers.
| AUTO TRADER (AUTO) | ||||
| ORD PRICE: | 457.2p | MARKET VALUE: | £4.29bn | |
| TOUCH: | 456.4-458.6p | 12-MONTH HIGH: | 471p | LOW: 313p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 2p* | NET DEBT: | £316m | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 (restated IFRS 16) | 165 | 105 | 8.71 | 1.9 |
| 2018 | 177 | 115 | 9.78 | 2.1 |
| % change | +7 | +9 | +12 | +11 |
| Ex-div: | 3 Jan | |||
| Payment: | 25 Jan | |||
| *Includes intangible assets of £328m, or 35p a share | ||||
