By Samuel Indyk
Investing.com – Auto Trader was the best performing stock in the FTSE 100 on Thursday after the company announced full year results for the period ending 31st March 2021.
Revenue and profits at the vehicle marketplace fell but the company still managed to turn a profit during the pandemic-hit year.
Revenue was down by 29% to £262.8mln from £368.9mln in 2020 as the company provided free advertising for retail customers during April, May, December and February, while also providing a discount in June.
This led to a decline in pre-tax profit of 37% to £157.4mln for the full year.
Nevertheless, the London listed company said cross platform visits were up 15% on average throughout the year.
“There has been a dramatic shift towards buying online which means we now have more buyers than ever turning to Auto Trader to help with their next car purchase, making us even more relevant to retailers and manufacturers,” said Auto Trader Chief Executive Nathan Coe. “This positions us ideally to enable the buying and selling of cars online, which will materially improve the car buying experience and the business of our customers.”
Outlook
Auto Trader said that COVID-19 is currently having little impact on the financial performance of the business, despite unusually strong demand and tight supply.
The company said it expects to deliver high single digit growth on FY20 average revenue per retailer and said it is confident for the future prospects of the business.
"Auto Trader may have swerved into the slow lane during the pandemic but it still has the dominant position in the market and continues to be the go-to online destination for car sales," writes Hargreaves Lansdown (LON:HRGV) Senior Investment and Markets Analyst Susannah Streeter. "With many buyers unable to browse physical showrooms, they turned to online searches instead."
"This bodes well for the months ahead as higher customer engagement should lead to higher trade and advertising revenue for the company."
At 08:57BST, shares in Auto Trader (LON:AUTOA) were trading higher by 6.3% at 614.4 pence per share.