Proactive Investors - Auto Trader Group PLC (LON:AUTO) share rose 12% to a new all-time high above 819p after it posted results ahead of expectations and said the used car market seems to be remaining robust, though discounting has returned for new cars.
The FTSE 100 company reported revenue revved up 14% to £570.9 million and operating profit zoomed 26% higher to £348.7 million.
Core revenue grew 12% and operating profit 14%, with operating profit margins expanding, as the company said both its marketplace and competitive position have strengthened in the past 12 months, with record numbers of buyers and sellers.
"The used car retail market has been robust throughout the financial year, which we expect to continue. Demand is resilient with cars continuing to sell faster than before the pandemic and used car supply has gradually improved," the company said.
The new car retail market has been "more challenging and discounting has started to return", however, but it still sees the structural changes in this market as a "significant opportunity".
The new financial year has "started well", it said, with "another good year" of average revenue per retailer (ARPR) growth expected across all three parts of the business.
Losses from the Autorama business are expected to reduce despite tight supply conditions in the leasing channel for new vehicles continuing.
As it has mentioned the new year is expected to exceed the threshold for the UK's digital services tax, which will be taken as an operating expense denting margins, but at group level modest margin expansion is expected.
Analysts at Jefferies said the results outperformed second-half expectations for ARPR growth and number of retailers leading to "solid mid-single-digit percentage beats" to group revenue and EBIT.
FY25 guidance is in-line with consensus expectations, "though the impact of the Digital Services Tax remains a small smudge on Auto Trader segment margin expectations".