Auto Trader shares fall 10% as it reveals dwindling retail sales
Auto Trader has claimed Britain's automotive market is in 'good health' with growing new and used car sales, defying another year of high interest rates and weak consumer confidence.
The car selling platform said Britain's new car market grew 3 per cent over the last year, mainly driven by more sales for company fleet vehicles, but standard retail sales slipped 4 per cent year-on-year.
Amid dwindling retail sales, Auto Trader shares fell 10 per cent in early trading on Thursday.
It said it saw 'strong levels of demand for used cars', with 4 per cent more sales this year than last year, but supply levels remained below pre-pandemic levels.
Auto Trader said used car pricing had been 'stable' over the last 12 months after declines in the previous financial year.
The group said it saw a 5 per cent rise in the number of cars advertised through its platform, an average of 449,000 per month through the year.
It said consumers made a record 81.6million visits to Auto Trader's platforms this year.
Auto Trader's revenue came in at £601.1million for the year to 31 March, up 5 per cent compared with the previous year, while profits jumped 8 per cent to £376.8million.
The growth in both markets came despite another year of high interest rates and inflation, which the company said put 'financial pressure' on customers.
Auto Trader said that through much of the year, consumer demand exceeded the supply of used cars, meaning sales tended to happen faster.
Nathan Coe, chief executive of Auto Trader, said: 'Despite broader macroeconomic uncertainties, the UK car market is in good health and we continue to deliver against our strategy to improve car buying and retailing'.
He added that the company launched a new artificial intelligence product range called Co-Driver, which is helping to speed up searches on Auto Trader's platform.
Coe said: 'The first wave of Co-Driver products has already successfully enhanced the quality of adverts, while reducing the amount of time it takes for retailers to advertise their vehicles.
'We see significant potential for the use of AI to improve the buying and selling of cars in the years ahead.'
'We remain confident in the outlook for the business given our strong market position, the value we deliver for customers, and our unique data and technology capabilities.'
Having fallen 10 per cent earlier, Auto Trader shares were hovering down 9.78 per cent or 88.00p on Thursday.
Mark Crouch, a market analyst for eToro, said:: 'Auto Trader has been something of a hidden gem for investors, though by now, the secret's well and truly out.
'The online car marketplace posted an 8 per cent rise in operating profit over the year, but shares stalled this morning after what many saw as an underwhelming earnings report.
'One of Auto Trader's biggest advantages, beyond its slick new AI-powered Co-Driver tools, is the sheer lack of serious competition.
'As Warren Buffett famously said, a great business has a 'moat' and Auto Trader certainly has that. With margins north of 60 per cent and a market cap ten times that of its nearest rival, makes it the clear go-to destination for online car sales in the UK.
'The UK's digital services tax has proved to be a bump in the road, however with that said, for long-term investors, it's been a smooth ride, and with the company still firing on all cylinders, today's dip may prove more of a pit stop than a sign of breakdown.'
Richard Hunter, head of markets at Interactive Investor, said: 'These numbers are middle of the road by the standards Auto Trader has set itself and the shares are being somewhat punished as a result.
'The sharp decline follows an increase of 23 per cent over the last year for the shares, as compared to a hike of 6.6 per cent for the wider FTSE 100, and continuing momentum which has seen a jump of 44 per cent over the last two years.
'Improving profits bring both higher expectations and indeed valuations and even after this latest drop, the shares are not obviously cheap on a historic basis.
'As such, the market consensus is likely to stay at a hold for the time being, albeit a strong one, as investors assess this disappointment even though the group's continued innovation and dominant UK market position bode well for prospects.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
10 minutes ago
- The Independent
Europe ends largely higher after US jobs report
European blue-chip stocks ended largely higher on Friday, growing in confidence after a stronger-than-expected US nonfarm payrolls reading. The FTSE 100 index rose 26.87 points, 0.3%, at 8,837.91. The FTSE 250 ended up 87.90 points, 0.4%, at 21,157.28, and the AIM All-Share climbed 2.42 points, 0.3%, at 756.88. For the week, the FTSE rose 0.8%, the FTSE 250 added 0.6%, and the AIM All-Share shot up 1.4%. In Paris, the CAC 40 rose 0.2%, while Frankfurt's DAX 40 ended 0.1% lower. The pound was quoted at 1.3522 US dollars late on Friday afternoon in London, lower compared to 1.3596 dollars at the equities close on Thursday. The euro stood at 1.1387 dollars, lower against 1.1456 dollars. Against the yen, the dollar jumped to 144.93 yen compared to 143.57 yen. The US economy added more jobs than expected last month, although the pace of hiring eased, numbers on Friday showed. According to the latest nonfarm payrolls from the Bureau of Labour Statistics, 139,000 more jobs were added to the US economy in May, topping the FXStreet-cited consensus of 130,000. The pace of job creation abated from 147,000 in April, a figure which was downwardly revised from 177,000. March's figure was revised down to 120,000 from 185,000. It means that in April and March combined, 95,000 fewer jobs were created than previously reported. The unemployment rate in May was 4.2%, in line with consensus and unmoved from April. The BLS said the jobless rate has been in a narrow range of 4.0% to 4.2% over the past year. Schroders analyst George Brown said: 'While it is premature to conclude the US economy will weather the tariff turmoil, the early signs remain encouraging, with a respectable 139,000 jobs created in May. Evidently there is a risk that the hit to confidence eventually leads to a sharp retrenchment. But we view this as unlikely given Donald Trump's first presidency demonstrated this is just part of his unconventional approach to deal-making. 'And while recent court rulings lower the risk of tariffs being raised to prohibitive rates, elevated inflation expectations will mean the Federal Reserve will be wary of falling behind the curve again. As such, our base case remains that the Fed will keep rates on hold for the rest of the year.' The yield on the US 10-year Treasury was quoted at 4.48%, stretching from 4.39% a day prior. The yield on the US 30-year Treasury was quoted at 4.94%, widening from 4.89%. In New York, the Dow Jones Industrial Average was up 0.8%, the S&P 500 climbed 0.9% and the Nasdaq Composite sat 1.1% higher at the time of the closing bell in London. Tesla shares perked up 5.9%, after a 14% slump on Thursday. Nonetheless, the spat between the electric carmaker's chief executive Elon Musk and US president Donald Trump continued. The White House squashed speculation that Mr Trump and Mr Musk would patch up their stunning public feud, saying the US president had no plans to call his billionaire former aide on Friday. Mr Trump lobbed fresh insults at the South African-born Mr Musk a day after the fiery implosion of their unlikely political marriage, saying the tech tycoon had 'lost his mind'. In a telling symbol of how their relationship had deteriorated, the president was even considering selling or giving away a Tesla he had bought to show support for Mr Musk amid protests against the company. On the move in London, banking shares helped support the FTSE 100. StanChart rose 2.9%, while Barclays added 1.9%. Defence stocks, which have enjoyed a strong week, returned some progress. BAE Systems shed 2.6%, snapping a five-day winning streak. Babcock lost 4.3%. Elsewhere, Dr Martens extended gains, adding another 8.7% after a more than 25% jump on Thursday. The boot maker had signalled a return to growth in the year ahead and a refreshed strategy on Thursday. Pinewood Technologies shot up 11%. The Birmingham-based provider of software to the automotive retailing sector said it has agreed to buy out a 51% stake in its joint venture, Pinewood North America, from Lithia UK for 76.5 million dollars in shares. Lithia UK is a wholly owned subsidiary of Oregon, US-based car dealer Lithia Motors. Pinewood said that it will enter a five-year contract with Lithia to roll out its software to all Lithia's current and future sites across the US and Canada by the end of 2028 at the latest. The company said it expects to generate around 40 million dollars in annual recurring revenue from Lithia in North America once its platform has been fully deployed. The biggest risers on the FTSE 100 were Standard Chartered, up 33.50 pence at 1,186.00p, 3i Group, up 115.00p at 4,265.00p, Hiscox, up 25.00p at 1,351.00p, Barclays, up 6.15p at 333.20p, and Aviva, up 11.20p at 626.80p. The biggest fallers on the FTSE 100 were Babcock International, down 48.00p at 1,057.00p, Anglo American, down 76.50p at 2,217p, Endeavour Mining, down 74.00p at 2,312.00p, Antofagasta, down 52.00p at 1,895.50p, and BAE Systems, down 51.50p at 1,930.50p. Brent oil rose to 66.21 dollars a barrel late in London on Friday afternoon, from 65.51 dollars late on Thursday. Gold was quoted lower at 3,330.06 dollars an ounce against 3,364.84 dollars. Monday's economic calendar has a Chinese consumer price inflation reading overnight. As the week progresses, there is UK unemployment data on Tuesday and a gross domestic product reading on Friday. Stateside, there is consumer price inflation data on Wednesday, before the producer price index on Thursday. Next week's UK corporate calendar has trading statements from housebuilder Bellway on Tuesday and grocer Tesco on Thursday.
The Independent
14 minutes ago
- The Independent
Bargain Hunt expert jailed for failing to report art sales to ‘Hezbollah financier'
A BBC Bargain Hunt art expert who failed to report a series of high-value art sales to a man suspected of financing militant group Hezbollah has been jailed for two-and-a-half years. Oghenochuko Ojiri, 53, sold artwork worth around £140,000 to Nazem Ahmad, a man designated by US authorities as a suspected financier for the Lebanese organisation, a court hearing was told last month. Ojiri, of Brent, north London, previously pleaded guilty to eight offences under section 21A of the Terrorism Act 2000. He is believed to be the first person to be charged with the specific offence. The art dealer, who has also appeared on the BBC's Antiques Road Trip, was charged with failing to disclose information about transactions in the regulated art market sector on or before dates between October 2020 and December 2021. US prosecutors say Mr Ahmad was a 'major Hezbollah financial donor' who used high-value art and diamonds to launder money and fund the group. He is accused of evading terrorism sanctions by using front companies to acquire more than 160 million dollars (£120 million) in artwork and diamond services. Following the introduction of new money laundering regulations in January 2020 that brought the art market under HMRC supervision, Ojiri is said to have discussed the changes with a colleague, indicating awareness of the rules. The court previously heard the total value of the artwork sold was around £140,000. Mrs Justice Cheema-Grubb sentenced Ojiri to two years and six months in prison at the Old Bailey on Friday, with a further year to be spent on licence.
The Independent
20 minutes ago
- The Independent
BBC Bargain Hunt expert jailed after failing to report sales to ‘Hezbollah financier'
A Bargain Hunt art expert has been jailed after failing to report a series of high-value art sales to a man suspected of financing the militant group Hezbollah. A court hearing heard how Oghenochuko Ojiri, 53, sold artwork worth around £140,000 to Nazem Ahmad, a man designated by US authorities as a suspected financier for the Lebanese organisation. Ojiri, of Brent, north London, previously pleaded guilty to eight offences under section 21A of the Terrorism Act 2000. He is believed to be the first person to be charged with the specific offence. The art dealer, who has also appeared on the BBC 's Antiques Road Trip and Put Your Money Where Your Mouth Is, was charged with failing to disclose information about transactions in the regulated art market sector on or before dates between October 2020 and December 2021. Mr Ahmad has been described by US prosecutors as a 'major Hezbollah financial donor' who used high-value art and diamonds to launder money and fund the group. He is accused of evading terrorism sanctions by using front companies to acquire more than 160 million dollars (£120 million) in artwork and diamond services. Following the introduction of new money laundering regulations in January 2020 that brought the art market under HMRC supervision, Ojiri is said to have discussed the changes with a colleague, indicating awareness of the rules. The court previously heard that the total value of the artwork sold was around £140,000. Mrs Justice Cheema-Grubb sentenced Ojiri to two years and six months in prison at the Old Bailey on Friday, with a further year to be spent on licence.
