Auto Trader Group LON: AUTO reported higher full-year revenue, operating profit and earnings per share for the year ended March 31, 2026, despite what management described as tougher-than-expected trading conditions for U.K. car retailers.
Nathan, who led the presentation, said the company had anticipated a more difficult year because of retailer profitability challenges, shortages of stock in some age cohorts and fast speed of sale. However, he said retailer profitability was “more challenging than we expected,” citing new car profitability pressures, the U.K.’s zero-emission vehicle mandate and cost increases following the prior year’s government budget.
Those pressures led retailers to scrutinize costs, with Nathan referring to profit declines, redundancies and store portfolio restructurings across the sector. He said pressure was most acute in November and December and coincided with feedback on Auto Trader’s accelerated rollout of Deal Builder, its digital retailing product. He said the situation was amplified on social media, including “some factual inaccuracies” that the company has since clarified with customers.
“Following this period, we have seen higher cancellation levels than in previous years, which has impacted both FY26 and the run rate into FY27,” Nathan said. Still, he added that retailer numbers, stock and upsells have all been growing since the end of the financial year. “We are past the low point,” he said.
Revenue and Profit Rise Despite Retailer Churn
Jamie Warner said total Auto Trader revenue increased 4% to GBP 585.3 million. Trade revenue also rose 4%, with retailer revenue, its largest component, up 4% as well. Revenue from manufacturing agency customers increased 14%, helped by manufacturers supporting franchise networks with new and used car advertising.
Consumer services revenue declined 8%, including an 11% fall in private revenue from individual sellers due to lower listing volumes. Motoring services revenue fell 4%, reflecting lower revenue from the company’s insurance product.
The average number of retailer forecourts on the platform declined by 71, or 0.5%, to 13,942. Warner said the company ended the year with 460 fewer paying retailers than at the end of the first half. Average revenue per retailer rose 5% to GBP 2,995 per month, supported by pricing and product growth, while stock made a negative contribution.
Auto Trader costs increased 4% to GBP 181.4 million. People costs rose 1% to GBP 93.6 million, while marketing spend fell 11% to GBP 21.9 million. Other costs increased 13%, driven by higher cloud infrastructure expenditure and increased property costs tied to the company’s new head office. Depreciation and amortization rose 49% to GBP 9.4 million, also due to the new office lease.
Operating profit for Auto Trader increased 4% to GBP 408 million, with operating margins steady at 70%. Total group operating profit rose 4% to GBP 392.7 million, with group operating margins stable at 63%. Cash generated from operations increased 5% to GBP 418 million, and earnings per share rose 8%, helped by share buybacks.
Deal Builder Remains a Long-Term Focus
Management emphasized that Deal Builder remains central to the company’s strategy, even after customer pushback during the accelerated rollout. Nathan said car buyers like being able to go deeper into the transaction outside dealership opening hours, while retailers benefit from selling out of hours and receiving buyers who are at least twice as likely to convert to a sale.
He said Auto Trader slowed the rollout, made product changes and gave retailers the option to choose either full reservations or a request-a-reservation model. The company said penetration continued to increase during the year and that it still aims to reach 100% penetration during FY27.
During the analyst question-and-answer session, Nathan said the company’s fundamental view of Deal Builder had not changed, but its implementation needed to change. He said Auto Trader is currently focused on embedding the product and increasing the number of reservations and deals flowing through it, rather than prioritizing near-term monetization of finance or part-exchange features.
AI Investments Highlighted as Core to Product Roadmap
Nathan said Auto Trader has invested over many years in cloud delivery, data and artificial intelligence platforms, supported by a 400-person product and technology team. He said the company has developed more than 50 AI models and uses its proprietary vehicle taxonomy across many parts of the platform.
The company highlighted several AI-related products, including Co-Driver tools that optimize vehicle image order, identify missing images and write vehicle descriptions. Nathan said foundational models alone can produce errors or miss important features, so Auto Trader combines foundation models with proprietary data and specialized models.
Auto Trader also launched Buying Signals, which uses AI models to predict the likelihood that a customer will buy a vehicle based on their journey on the site. Nathan said the product has been added to 800,000 inquiries since launch and that high-intent inquiries typically convert twice as well as an average Auto Trader inquiry.
The company said AI chatbot traffic remains small. Nathan said AI chatbots account for less than 1% of traffic, while later in the Q&A he clarified that LLM-originated traffic is less than 0.5%. He said Auto Trader has built an MCP server to enable agents to interact with its platform and has an initial implementation through a ChatGPT app, but the effort is more about building infrastructure than immediately increasing traffic share.
Shareholder Returns and Capital Allocation Updated
Auto Trader accelerated share buybacks in the second half of the year, acquiring 58.5 million shares, or 6.6% of issued share capital, for GBP 369.1 million. Warner said the company bought three and a half times more shares in the second half than in the first half, prompted by the lower share price.
The board said it believes the prevailing share price does not reflect the company’s fundamentals or long-term prospects. Auto Trader plans to continue returning about one-third of net income through dividends while accelerating buybacks. Warner said the company expects to purchase around GBP 500 million of shares in FY27 and will request authority to buy up to 15% of issued share capital at its July AGM.
The company declared a final dividend of GBP 0.078 per share, bringing full-year dividends up 9% year-on-year. Nathan said Auto Trader expects to return more than GBP 1 billion to shareholders across FY26 and FY27 combined.
FY27 Outlook Calls for Profit Growth and Improving Trends
For FY27, Auto Trader expects group operating profit of GBP 395 million to GBP 415 million. Management said operating profit margins, excluding vehicle and accessory sales, are expected to be at least maintained, and continued buybacks are expected to result in at least high single-digit EPS growth.
Auto Trader revenue was flat year-on-year in April 2026 due to a lower run rate and package increase. Nathan said retailer forecourts, paid stock volumes and package penetration are improving, with growth expected to flow through in the second half.
Autorama revenue was GBP 39 million in FY26, while the segment posted an operating loss of GBP 2 million, a significant reduction from the prior year. Warner said Autorama will be reported as a single operating segment with the rest of Auto Trader from FY27 because more than half of leasing transactions were delivered through the Auto Trader platform in the second half of FY26.
For Autorama in FY27, management expects a small profit, with commission and ancillary revenue growing 8% to 12% and vehicle and accessory sales of around GBP 40 million.
About Auto Trader Group LON: AUTO
Autotrader Group plc is the UK's largest automotive marketplace and a leading digital platform for the automotive industry. Listed on the London Stock Exchange since March 2015, the company is a member of the FTSE 100 Index.
Autotrader's purpose is Driving Change Together. Responsibly. The company uses advanced data science, artificial intelligence and scalable technology to improve how vehicles are bought and sold, while building stronger partnerships with its customers and the wider automotive ecosystem.
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