Auto Trader PLC (LON:AUTO) said the Coronavirus (COVID-19) pandemic has caused a major shift in car buying habits in the UK.
“There has been a dramatic shift towards buying online,” said chief executive Nathan Coe.
“We now have more buyers than ever 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 policy of free adverts during the lockdown period sent profits plunging.
The online and catalogue car seller said revenues dropped by 29% to £263mln in the year to end-March, 2021, while profits fell 37% to £157.4mln.
AutoTrader said the results were affected by free advertising in April 2020, May 2020, December 2020 and February 2021, and a discounted rate in June 2020.
Average Revenue per Retailer (ARPR) declined by 32% to £1,324 (2020: £1,949) though without the COVID-19 related discounts ARPR grew by £87 year-on-year as a decline in paid stock was offset by an increase in price and product:
Customer goodwill improved as a result of the discounts, Coe said, and this had enabled the group to bounce back strongly now that restrictions are being eased.
Coe added: “We decided early on to proactively support our people, car buyers and our customers, many of whom run small family-owned businesses. These actions have positioned us for a strong start to this next financial year.”
Auto Trader said that this year to March 2022 it expects high single-digit growth compared to the pre-pandemic ARPR and also to generate operating margins in line with two years ago.
“Despite unusually strong demand and tight supply, COVID-19 is currently having little impact on the financial performance of the business as we start Financial Year 2022.”
The dividend is being restored with a 5p final payment.