Auto Trader earnings lower amid car supply shortages
The group reported a 2% fall in pre-tax profits to £293.6m for the year to March 31, although revenues jumped 16% to £500.2m.
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Your support makes all the difference.Online car marketplace Auto Trader has reported lower annual earnings after a year affected by ongoing shortages of new vehicles.
The group reported a 2% fall in pre-tax profits to £293.6 million for the year to March 31, although revenues jumped 16% to £500.2 million and were 9% higher in its core Auto Trader business.
It said soaring demand saw cars sell faster than at any time since its flotation eight years ago, which held back the number of vehicles listed on Auto Trader.
The car market was affected by ongoing severe supply woes amid the global semiconductor shortage, which saw the group’s listings for new cars drop to 25,000 on average from 29,000 the previous year.
Used car stock increased 3% over the year, but was still 35,000 cars lower than pre-pandemic levels, with the new car supply issues leading to a jump in demand for used vehicles.
Despite continued economic uncertainty and automotive industry changes we feel confident about the year ahead
The group’s operating profits dropped 9% to £277.6 million, dragged lower by its recently acquired loss-making vehicle leasing business Autorama, which saw operating losses of £11.2 million.
But the Auto Trader arm notched up a 10% rise in operating profits.
Chief executive Nathan Coe hailed a solid performance “given the challenging economic backdrop and historically low levels of vehicle supply”.
He added: “Despite continued economic uncertainty and automotive industry changes we feel confident about the year ahead.”
The group said the new year has started well and that its short-term focus is on “significantly reducing” the operating losses in Autorama by integrating it further into the Auto Trader business and keeping a lid on costs.
It also expects a slight drop in car retailer numbers over the year ahead due to its move to sell off the Webzone business.
The figures came as it named former Tesco UK and Ireland chief executive and Pets at Home boss Matt Davies as its incoming chairman, to replace Ed Williams when he steps down in 2024.