Auto Trader doubles down on digital offering amid pandemic blow
Car buyers using Auto Trader’s platform has hit record levels, the group said this morning, as it bolstered its online offering after the pandemic pushed the pedal on the digital sphere.
Despite doubling down on its digital presence, the group was still knocked by the pandemic as its revenue sank 29 per cent to £262.8m in the year to 31 March, £106.1m less than last year’s financial results.
Profit before tax was also down 37 per cent, taking the figure to £157.4m, which was £94.1m less than the year before the pandemic.
However, the group’s shares continued to soar into this afternoon by 7.23 per cent to 619p per share.
‘’Revenues and profits have gone into reverse at AutoTrader, but it’s by no means a total write off with the company in pole position to capitalise on the shift to online car sales,” senior investment and markets analyst, Susannah Streeter, said.
“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. With many buyers unable to browse physical showrooms, they turned to online searches instead.”
The social shift to online made the car retailer “even more relevant” to customers and manufacturers, CEO Nathan Coe agreed.
“There has been a dramatic shift towards buying online which means we now have more buyers than ever turning to Auto Trader,” Coe continued.
In April last year, when governments began eyeing lockdowns, Auto Trader placed around 46m shares which raised net proceeds of £182.9m.
The shares helped the group rally enough funds to boost its digital retail plans and the board eventually reinstated its final dividend of 5p per share.
The shift online in automotive retailing has accelerated, the group said this morning, which is why it pumped money into its new platform AutoConvert – a site for dealers, brokers, car supermarkets and dealer networks.
The group furloughed around 25 per cent of its workforce for almost seven weeks but reversed it as soon as Auto Trader had the fiscal confidence to push through the pandemic.