Auto Trader Group (LON:AUTO) Issues Earnings Results

Key Points

• First-half performance was broadly in line with expectations: revenue excluding vehicle and accessory sales was flat at £301.8 million, while operating profit declined 1% to £198.5 million. Auto Trader maintained full-year operating profit guidance of £395 million to £415 million and expects revenue growth to accelerate in the second half.
• Retailer numbers began to recover: forecourts increased from 13,600 to 13,900 during the half, and average revenue per retailer rose 1%, although lower stock volumes weighed on revenue.
• Shareholder returns remained significant: Auto Trader returned £330 million through dividends and buybacks in the first half, plans about £500 million in buybacks for the full year, and proposed an interim dividend 11% higher year over year.

Auto Trader Group (LON:AUTO - Get Free Report) announced its quarterly earnings results on Thursday. The company reported GBX 18.10 EPS for the quarter, Digital Look Earnings reports. The company had revenue of £313.40 million during the quarter. Auto Trader Group had a return on equity of 60.53% and a net margin of 47.08%.

Here are the key takeaways from Auto Trader Group's conference call:

• First-half results were broadly in line with expectations: revenue excluding vehicle and accessory sales was essentially flat at £301.8 million, while operating profit fell 1% to £198.5 million. Autotrader maintained full-year operating profit guidance of £395 million to £415 million and expects revenue growth to accelerate in the second half.
• Retailer numbers recovered during the half: forecourts rose from 13,600 at March-end to 13,900 at September-end, and Autotrader has re-signed two-thirds of departed retailers that are still trading. Average revenue per retailer increased 1%, though lower stock volumes weighed on the result.
• Autotrader plans to expand beyond its marketplace with Autotrader Intelligence, using proprietary vehicle data, AI models and industry integrations to develop buyer, retailer and manufacturer services. Management sees potential for incremental revenue, but did not quantify the growth opportunity and said adoption and monetization will build over time.
• Shareholder returns remained substantial: the company returned £330 million through dividends and buybacks in the first half, plans approximately £500 million of buybacks for the full year, and proposed an interim dividend up 11%. Basic EPS rose 5% to 18.1 pence, partly aided by the reduction in shares outstanding.
• Engagement softened during parts of the half, with internal measures of time spent and visits weaker in June and July; executives attributed this mainly to market conditions and said sales influence edged up year on year. Retailers continue to face cost pressures, while smaller independents’ lower stock levels reduced Autotrader’s stock-related revenue contribution.

Auto Trader Group Trading Down 2.2%

AUTO traded down GBX 12.60 on Thursday, hitting GBX 558.20. The company had a trading volume of 3,601,220 shares, compared to its average volume of 33,622,148. The company has a market cap of £4.29 billion, a PE ratio of 16.38, a PEG ratio of 3.99 and a beta of 0.72. Auto Trader Group has a 12-month low of GBX 418.60 and a 12-month high of GBX 828.80. The company has a quick ratio of 1.50, a current ratio of 1.73 and a debt-to-equity ratio of 51.83. The business's fifty day simple moving average is GBX 504.24 and its 200 day simple moving average is GBX 497.52.

Wall Street Analyst Weigh In

AUTO has been the topic of several recent research reports. JPMorgan Chase & Co. decreased their price objective on Auto Trader Group from GBX 445 to GBX 440 and set an "underweight" rating on the stock in a report on Wednesday, August 5th. Jefferies Financial Group reissued a "buy" rating and issued a GBX 640 target price on shares of Auto Trader Group in a report on Thursday. Finally, Royal Bank Of Canada reduced their price target on shares of Auto Trader Group from GBX 830 to GBX 535 and set a "sector perform" rating on the stock in a research report on Friday, July 17th. Two equities research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat.com, Auto Trader Group has a consensus rating of "Hold" and a consensus target price of GBX 562.43.

About Auto Trader Group

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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