Auto Trader PLC (LON: AUTO) said the coronavirus pandemic (COVID-19) had caused a major shift in car buying habits in the UK.
“There has been a dramatic shift towards buying online,” said CEO Nathan Coe.
“We now have more buyers than ever before who are turning to Auto Trader to help with their next car purchase,” he said, adding that this would benefit the group in the longer term.
Coe’s comment came as a free advertising policy during the lock-up period, which caused profits to plummet.
The online and catalog auto salesman said that for the year ended March 2021, revenues were down 29% to £ 263 million, while profits were down 37% to £ 157.4 million.
According to AutoTrader, the results were influenced by free advertising in April 2020, May 2020, December 2020 and February 2021, as well as a discounted price in June 2020.
Average Sales Per Retailer (ARPR) decreased 32% to £ 1,324 (2020: £ 1,949), although ARPR excluding the COVID-19-related discounts increased £ 87 year-over-year as a decrease in paid inventory was caused by an increase in the Price and Product:
Customer goodwill has improved due to the discounts, Coe said, and this has allowed the group to recover strongly after the restrictions were eased.
Coe added, “We made an early decision to proactively support our employees, car buyers and our customers, many of whom run small family businesses. These measures have positioned us for a strong start to the next fiscal year.”
Auto Trader said it expects high single-digit growth this year through March 2022 compared to pre-pandemic ARPR and will also achieve operating margins like two years ago.
“Despite unusually strong demand and scarce supply, COVID-19 is currently only having a minor impact on the company’s financial performance at the beginning of the 2022 financial year.”
The dividend is restored with a final payment of 5p.
