REG - Auto Trader Grp - Half Year Results
07/11/2024 07:00
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RNS Number : 2672L Auto Trader Group plc 07 November 2024
Embargoed until 7.00am, 7 November 2024
AUTO TRADER GROUP PLC
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Auto Trader Group plc ('the Group'), the UK's largest automotive platform,
announces half year results for the six months ended 30 September 2024
Strategic overview
- Group revenue increased 8%, Group operating profit increased 14%
and Basic EPS increased 22%. Core Auto Trader revenue increased 9% and
operating profit before Digital Services Tax increased 10%. The impact of the
UK's Digital Services Tax, as previously signaled, was recognised for the
first time with a £5.1m charge in the first half.
- Retailer revenue grew in line with expectations at 8%
year-on-year, with the number of retailer forecourts stronger than we had
anticipated, increasing 2% year-on-year. However, due to this growth being
from smaller lower yielding retailers, this has had a dilutive impact on our
Average Revenue Per Retailer ('ARPR'), which coupled with the market dynamics
described below, increased 6.3%/£169 in the period.
- Our annual pricing and product event, which took effect from 1
April 2024, has gone well with high levels of engagement with our latest Auto
Trader Connect module: Trended Valuations and enhanced Retail Check, both
products were included within our advertising packages.
- Over the past six months our marketplace and competitive position
have continued to strengthen. Cross-platform visits have grown 7% and we are
now more than 10x larger than our nearest competitor (H1 2024: 10x).
- We continue to make good progress scaling our Deal Builder product
which enables car buyers to value their part-exchange, apply for finance and
reserve a car on Auto Trader. In the last six months we saw 23,000 deals,
which was more than 10x the number seen in the same period last year. At the
end of September 2024 there were c.1,500 retailers trialling the product
(September 2023: c.500), with c.20% of those customers now paying, as we have
gradually started monetisation.
Car market overview
- The new car retail market remains challenging, with a 10% decrease
in H1 volumes on depressed levels seen in the prior year, despite an increase
in discounts being offered by manufacturers. Total registration volumes were
broadly flat, with the fall in retail volumes being offset by growth in the
fleet segment. Since January, the share of battery electric vehicles as a
percentage of total car sales increased to 18%, although it remains short of
the 22% target required under the Zero Emission Vehicle ('ZEV') mandate for
calendar year 2024.
- Despite this weakness in the new car market, we continue to see
strong levels of demand for used cars, with a record number of cross-platform
visits in the first half. As we moved through H1, supply constraints have
emerged, limiting vehicle availability. This combination of high demand and
restricted supply has led to cars selling at an increasingly faster rate.
- During the first half, the increase in overall used car
transactions corresponded with the 5% rise in the number of unique cars sold
through Auto Trader. However, due to the fast speed of sale and cars being
advertised for shorter periods of time, this has not corresponded with an
increase in live adverts, with retailers benefiting from increased utilisation
of Auto Trader's slot-based advertising model. Therefore, even though consumer
activity and retailer use of the Auto Trader platform have both increased, it
has not directly benefited revenue.
- Used car pricing has been broadly stable over the last six months,
having declined through much of the last financial year.
Financial results
£m (unless otherwise specified) H1 2025 H1 2024 Change
Auto Trader(1) 283.5 259.4 9%
Autorama 19.0 21.1 (10%)
Group revenue 302.5 280.5 8%
Auto Trader(1) 197.5 184.9 7%
Autorama (2.8) (5.6) 50%
Group central costs(2) - relating to Autorama acquisition (6.3) (14.7) 57%
Group operating profit 188.4 164.6 14%
Auto Trader operating profit margin 70% 71% (1%) pts
Group operating profit margin 62% 59% 3% pts
Basic earnings per share (pence) 15.56p 12.74p 22%
Cash generated from operations(3) 201.6 184.2 9%
Adjusted EBITDA(4) 196.9 182.1 8%
Adjusted earnings per share (pence)(5) 15.56p 13.96p 11%
- We have returned £122.2 million to shareholders (H1 2024: £117.1
million) through £64.9 million of share buybacks and dividends of £57.3
million.
- Interim dividend declared of 3.5 pence per share (H1 2024: 3.2
pence per share).
Operational results
- Over 75% of all minutes spent on automotive marketplaces were spent
on Auto Trader(6) (H1 2024: over 75%). Cross platform visits(7,9) were up 7%
to 82.6 million per month (H1 2024: 77.0 million) and cross platform
minutes(7,9) increased to 560 million per month (H1 2024: 555 million).
- The average number of retailer forecourts(7) in the period
increased 2% to 13,986 (H1 2024: 13,710).
- Average Revenue Per Retailer(7) ('ARPR') per month was up 6.3% (or
£169) to £2,852 on average (H1 2024: £2,683), driven by a positive
contribution across all three growth levers.
- Live car stock(7,11) onsite was up 2% to 448,000 cars (H1 2024:
439,000) on average, with this increase due to a higher volume of private
listings. We delivered 3,180 new lease vehicles (H1 2024: 4,593), a segment
which continues to be impacted by limited supply.
- The average number of employees(8) ('FTEs') in the Group increased
to 1,252 during the period (H1 2024: 1,220).
Cultural KPIs
- 91% of employees are proud to work at Auto Trader(12) (September
2023: 92%, March 2024: 97%).
- We continue to build a diverse and inclusive culture throughout
the organisation(13).
o Board: We have more women than men on our Board (March 2024: five women
and four men) and two ethnically diverse Board members (March 2024: one).
o Leadership: The percentage of women leaders(14,16) within the organisation
was 40% (March 2024: 42%) and those who are ethnically diverse(14,15,16) was
6% (March 2024: 6%).
o Organisation: The percentage of employees who are women was at 44%(16)
(March 2024: 44%) and those who are ethnically diverse(15,16) was 18% (March
2024: 17%).
- We aim to achieve net zero across our value chain before 2040 and
to halve our carbon emissions by the end of 2030. Most of our CO(2) emissions
are Scope 3, attributable to our suppliers and the small number of vehicles
sold by Autorama that pass through the balance sheet. Initial calculations
estimate total Group emissions (Scopes 1, 2 and 3) for the period to be
c.45.4k tonnes of carbon dioxide equivalent (FY 2024: 98.9k tonnes).
Nathan Coe, Chief Executive Officer of Auto Trader, said:
"Our strong results for the first half of this year reflect the record
numbers of customers choosing to partner with us to retail vehicles and drive
the performance of their businesses."
"We are pleased with the progress of Deal Builder, which allows car buyers to
secure their vehicle on Auto Trader and to complete more of the buying journey
online. We have also recently launched Co-Driver, a new suite of AI-powered
tools which significantly improves the automotive retailing experience for
consumers and retailers alike."
"We are confident in the outlook for the business given our strong market
position, and the opportunity to use our unique data, technology and AI
capabilities to improve the way vehicles are retailed in the UK."
2025 Outlook
The new financial year started well with strong growth in retailer forecourts,
a good pricing and product event, and growing sales volumes for our customers.
Retailer forecourts are likely to remain strong and be broadly consistent with
that reported in the first half. As this increase came from smaller lower
yielding retailers, the growth in both the price and product levers was
diluted, which we also expect to continue. Compared to our original outlook,
the impact on revenue from having more retailers but with lower price and
product contribution should broadly cancel each other out.
From a stock perspective, we have seen a 5% increase in unique cars sold
through Auto Trader, however due to the acceleration in speed of sale, this
has not translated into a meaningful increase in either live stock or the ARPR
stock lever. With no current sign of this trend changing and lapping a tougher
comparative period last year, we now expect the stock lever to be slightly
negative for the full year.
Previous guidance on other revenue lines, Autorama losses, Auto Trader and
Group operating profit margins and capital allocation policy remains broadly
unchanged.
Analyst presentation
A presentation for analysts will be held in person at the offices of Deutsche
Numis and via audio webcast and conference call at 9.30am, Thursday 7 November
2024. Details below:
Audio webcast:
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Conference call registration:
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If you have any trouble registering or accessing either the conference call or
webcast, please contact Sodali & Co on the details below.
For media enquiries
Please contact the team at Sodali & Co on +44 (0)20 7250 1446 or email
autotrader@sodali.com (mailto:autotrader@sodali.com)
About Auto Trader
Auto Trader Group plc is the UK's largest automotive platform. It listed on
the London Stock Exchange in March 2015 and is a member of the FTSE 100 Index.
Auto Trader's purpose is Driving Change Together. Responsibly. Auto Trader is
committed to creating a diverse and inclusive culture, to build stronger
partnerships with customers and use its influence to drive more
environmentally friendly vehicle choices.
With the largest number of car buyers and the largest choice of trusted stock,
Auto Trader's marketplace sits at the heart of the UK car buying process. That
marketplace is built on an industry-leading technology and data platform,
which is increasingly used across the automotive industry. Auto Trader is
continuing to bring more of the car buying journey online, creating an
improved buying experience, whilst enabling all its retailer partners to sell
vehicles online.
Auto Trader publishes a monthly used car Retail Price Index which is based on
pricing analysis of circa 800,000 unique vehicles. This data is used by the
Bank of England to feed the broader UK economic indicators.
For more information, please visit https://plc.autotrader.co.uk/
(https://plc.autotrader.co.uk/)
Cautionary statement
Certain statements in this announcement constitute forward looking statements
(including beliefs or opinions). "Forward looking statements" are sometimes
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "aims", "anticipates", "expects", "intends", "plans",
"predicts", "may", "will", "could", "shall", "risk", "targets", "forecasts",
"should", "guidance", "continues", "assumes" or "positioned" or, in each case,
their negative or other variations or comparable terminology. Any statement in
this announcement that is not a statement of historical fact including,
without limitation, those regarding the Company's future expectations,
operations, financial performance, financial condition and business is a
forward looking statement. Such forward looking statements are subject to
known and unknown risks and uncertainties, because they relate to events that
may or may not occur in the future, that may cause actual results to differ
materially from those expressed or implied by such forward looking statements.
These risks and uncertainties include, among other factors, changing economic,
financial, business or other market conditions. These and other factors could
adversely affect the outcome and financial effects of the plans and events
described in this results announcement. As a result, you are cautioned not to
place reliance on such forward looking statements, which are not guarantees of
future performance and the actual results of operations, financial condition
and liquidity, and the development of the industry in which the Group
operates, may differ materially from those made in or suggested by the forward
looking statements set out in this announcement. Except as is required by
applicable laws and regulatory obligations, no undertaking is given to update
the forward looking statements contained in this announcement, whether as a
result of new information, future events or otherwise. Nothing in this
announcement should be construed as a profit forecast. This announcement has
been prepared for the Company's group as a whole and, therefore, gives greater
emphasis to those matters which are significant to the Company and its
subsidiary undertakings when viewed as a whole.
To the extent available, the industry and market data contained in this
announcement has come from third party sources. Third party industry
publications, studies and surveys generally state that the data contained
therein have been obtained from sources believed to be reliable, but that
there is no guarantee of the accuracy or completeness of such data. In
addition, certain parts of the industry and market data contained in this
announcement come from the Company's own internal research and estimates based
on the knowledge and experience of the Company's management in the market in
which the Company operates. While the Company believes that such research and
estimates are reasonable and reliable, they, and their underlying methodology
and assumptions, have not been verified by any independent source for accuracy
or completeness and are subject to change without notice. Accordingly, undue
reliance should not be placed on any of the industry or market data contained
in this announcement.
Summary financial performance
Group results Units H1 2025 H1 2024 Change
Revenue £m 302.5 280.5 8%
Adjusted EBITDA(4) £m 196.9 182.1 8%
Operating profit £m 188.4 164.6 14%
Operating profit margin % 62% 59% 3% pts
Profit before tax £m 187.5 162.8 15%
Basic earnings per share Pence 15.56 12.74 22%
Adjusted earnings per share(5) Pence 15.56 13.96 11%
Dividend per share Pence 3.5 3.2 9%
Group cash flow
Cash generated from operations(3) £m 201.6 184.2 9%
Net Cash/(bank debt)(10) £m 15.1 (27.3) 42.4
Auto Trader results(1)
Trade £m 254.1 233.0 9%
Consumer Services £m 23.0 20.1 14%
Manufacturer & Agency £m 6.4 6.3 2%
Revenue £m 283.5 259.4 9%
People costs £m 46.6 39.3 19%
Marketing £m 11.2 12.3 (9%)
Other costs £m 21.7 21.4 1%
Depreciation & amortisation £m 3.2 2.8 14%
Digital Services Tax £m 5.1 - -
Operating costs £m 87.8 75.8 16%
Share of profit from joint ventures £m 1.8 1.3 38%
Operating profit £m 197.5 184.9 7%
Operating profit (excl DST) £m 202.6 184.9 10%
Operating profit margin % 70% 71% (1%) pts
Operating profit margin (excl DST) % 71% 71% -
Autorama results
Vehicle & Accessory Sales £m 13.6 14.0 (3%)
Commission & Ancillary £m 5.4 7.1 (23%)
Revenue £m 19.0 21.1 (10%)
Cost of goods sold £m 13.5 14.0 (4%)
People costs £m 3.9 6.7 (42%)
Marketing £m 1.9 2.6 (27%)
Other costs £m 1.7 2.1 (19%)
Depreciation & amortisation £m 0.8 1.3 (38%)
Digital Services Tax £m - - -
Operating costs £m 21.8 26.7 (18%)
Operating loss £m (2.8) (5.6) 50%
Group central costs - relating to Autorama acquisition(2)
Autorama deferred consideration £m - 11.1 (100%)
Depreciation & amortisation £m 6.3 3.6 75%
Operating costs £m 6.3 14.7 (57%)
Operating loss £m (6.3) (14.7) 57%
1. Auto Trader includes the results of Auto Trader and AutoConvert in
respect of online marketplace advertising of motor vehicles and other related
products and services in the digital automotive marketplace, including the
Dealer Auction joint venture.
2. Group central costs which are not allocated within either of the two
segmental operating profit/(loss) comprises a £6.3 million amortisation
expense (H1 2024: £3.6 million) relating to the fair value of intangible
assets acquired in the Group's business combination of Autorama and, in H1
2024, included an £11.1 million charge for the Autorama deferred
consideration settlement.
3. Cash generated from operations is defined as net cash generated from
operating activities, before corporation tax paid.
4. Adjusted EBITDA is earnings before interest, taxation, depreciation and
amortisation, share of profit from joint ventures, and Autorama deferred
consideration.
5. Adjusted earnings per share is calculated before the net of tax impact
of the Autorama deferred consideration.
6. Share of minutes is a custom metric based on Comscore minutes and is
calculated by dividing Auto Trader's total minutes volume by the entire
custom-defined competitive set's total minutes volume. The custom-defined list
includes: Auto Trader, Gumtree motors, Pistonheads, Motors.co.uk, eBay Motors,
Cazoo and CarGurus.
7. Average during the period.
8. Average during the period, including contractors.
9. As measured internally through Snowplow.
10. Net Cash/(bank debt) represents cash less gross bank debt before amortised
debt costs, and does not include amounts relating to leases, non-bank loans or
vehicle stocking loans.
11. Physical car stock advertised on autotrader.co.uk.
12. Based on a survey to all employees in October 2024 asking our people to
rate the statement "I am proud to work for Auto Trader". Answers were given on
a five-point scale from strongly disagree to strongly agree.
13. As at 30 September 2024.
14. We define leaders as those who are on our Operational Leadership Team
('OLT') and their direct reports.
15. Throughout the year we have asked our employees to voluntarily disclose
their ethnicity, at period end we had 104 employees (8%) who had not yet
disclosed.
16. We calculate all our diversity percentages using total group headcount,
1,296 as at 30 September 2024 (September 2023: 1,252). At the period end, we
had 570 employees who are women, 719 employees who are men and 7 who are
non-binary.
Summary of Group operating performance
Group revenue grew 8% to £302.5 million (H1 2023: £280.5 million). Revenue
growth in the core Auto Trader business grew 9% to £283.5 million (H1 2024:
£259.4 million), underpinned by continued retailer revenue growth which
included better than expected growth in retailer forecourts. Autorama revenue
was £19.0 million (H1 2024: £21.1 million), where we have continued to focus
on preparing to scale profitably while this channel sees relatively low
transaction volumes.
Group operating profit increased by 14% to £188.4 million (H1 2024: £164.6
million), reflecting the increase in revenue and the £8.4 million reduction
in Group central costs to £6.3 million (H1 2024: £14.7 million). The
reduction was due to a deferred consideration charge in the prior year, with
no charge incurred this year. Group operating profit margin increased to 62%
(H1 2024: 59%).
Operating profit in the core Auto Trader business was £197.5 million (H1
2024: £184.9 million), representing an operating profit margin of 70% (H1
2024: 71%). For the first time, the Group meets the threshold for the UK's
Digital Services Tax ('DST') which is recorded as an operating expense.
Excluding this operating profit growth in the core Auto Trader segment was 10%
and operating profit margin was 71%.
Group profit before tax increased 15% to £187.5 million (H1 2024: £162.8
million) and basic earnings per share increased 22% to 15.56p (H1 2024:
12.74p). Cash generated from operations increased 9% to £201.6 million (H1
2024: £184.2 million).
The network effects of our marketplace have strengthened throughout the
period, re-enforcing our position as the most effective sales channel for both
new and used cars across the UK. The average number of retailer forecourts
advertising on our platform increased to 13,986 (H1 2024: 13,710), with much
of the growth coming from our smaller retailers. Despite supply challenges
total live car stock onsite increased by 2% to an average of 448,000 cars (H1
2024: 439,000), although this growth came from an increase in private
listings.
There was an increase in both the number of cross platform visits and the
number of minutes spent on Auto Trader. Over 75% of all minutes spent on
automotive marketplaces were spent on Auto Trader (H1 2024: over 75%) and we
are now more than 10x larger than our nearest competitor (H1 2024: 10x).
UK car market
The used car retail market continues to see strong levels of demand with an
increasing volume of visits to our platform and high levels of engagement.
This demand has led to an increase in used car transactions, which correlates
with the 5% increase in the number of unique cars we've seen sold through Auto
Trader. These cars have sold faster than at any point in our recent history
and as we've moved through the last six months, this fast speed of sale has
led to the supply of vehicles becoming gradually more constrained, a trend
which has been a hallmark of the post COVID trading environment. Used car
pricing has been broadly stable month-on-month throughout the last six months,
although remains back year-on-year.
The new car retail market remains challenging with increased discounting and
offers. Although total new car registrations have increased marginally
year-on-year to 969k (H1 2024: 958k), this was largely driven by the fleet
sector. Private new car registrations were down 10% on an already depressed
level seen in the prior year. We continue to see an opportunity in new cars,
especially given a move to more of a "push" market for manufacturers. We now
have products to support franchise retailers, manufacturers and leasing
companies selling new cars directly to consumers on Auto Trader.
We do not believe that Auto Trader products will be directly impacted by the
recent Court of Appeal judgment against certain automotive finance lenders. We
are making the relevant changes in our leasing journey to disclose and capture
consent for commissions. We do not expect further product changes to be
required to Deal Builder but continue to monitor the situation very closely.
Similarly, Auto Trader is not directly impacted by the current FCA
investigation into the discretionary element of commission arrangements. We
expect these market developments to strengthen our role as an independent
aggregator of automotive finance products.
Progress against our strategy
Our purpose, "Driving Change Together. Responsibly" guides both our strategy
and decision-making across the organisation. Alongside our commitment to being
a responsible business, our strategy comprises three areas of focus: our
marketplace; our platform; and digital retailing. These areas are closely
interconnected, as our platform and our digital retailing capabilities build
on the strengths of our marketplace while also deepening our relationship with
customers and car buyers.
Marketplace
The Auto Trader marketplace is the foundation of our business, where we
provide UK car buyers with the best choice of vehicles and tools to navigate
their buying journey, including valuations, price flags, reviews and the best
search experience across all devices and channels.
Within marketplace, the largest area of revenue comes from retailer customers,
reported within our Trade segment, where customer numbers grew 2% to 13,986,
with much of the growth coming from smaller customers. This growth in lower
yielding customers, coupled with the market dynamics of strong demand and
tight supply meant lower growth in Average Revenue Per Retailer, ARPR, at
6.3%/£169 to £2,852 per month. ARPR growth came from all three levers:
price, stock and product. Our annual pricing and product event which took
effect from 1 April 2024, included an additional module of Auto Trader
Connect. This further embeds our data and insight into customers' businesses
to support them making better decisions, faster. The proportion of our
retailer stock on advertising packages above standard declined marginally to
34% (H1 2024: 35%), with strong levels of consumer demand and fast speed of
sale making upsell of these products more challenging.
We continue to invest in our new car experience. Franchise customers have been
able to advertise physical new cars for a number of years, and we ended the
period with c.2,300 paying for the product (September 2023: c.1,900).
Alongside this, we have launched a new car market extension product, allowing
manufacturers operating an agency model to advertise new cars directly to
consumers nationally. This revenue is included in the Manufacturer and Agency
line and whilst we have made good progress with eight brands using this
product at the end of September, there is still further optimisation required
before turning our focus to increased monetisation. We announced a new
partnership with What Car? for new cars. From October, all c.20,000 in-stock
and 'available soon' brand-new cars advertised on Auto Trader, were displayed
and accessible on the What Car? website as an onward journey from their
well-known editorial content.
We have continued to move forward our search experience, content and advice
for buying an electric vehicle. We recently launched a "find an electric car"
tool which offers consumers guidance on which electric car will best suit
their needs. As well as promoting EVs to consumers within our marketing
activity, continuing to scale our EV giveaway and supporting retailers with
the data and tools they need to sell these cars.
Platform
We continue to invest in our data platform, technology and data science
capability which we are increasingly making available to power not just our
own business but that of our customers and partners in the wider automotive
ecosystem. Through integrating directly with our platform, customers can take
advantage of the data and technology services we have built on the latest
technology at scale to power Auto Trader to source, price and drive sales
performance. For the vast majority of our customers the scale and performance
of this would otherwise be unattainable.
As part of our annual pricing and product event in April 2024, we made our
third module of Auto Trader Connect available, providing retailers with
Trended Valuations and enhanced Retail Check products. Combined, this powerful
new layer of intelligence helps retailers confidently adapt and respond to
daily market changes with quicker and more profitable sourcing, advertising,
and pricing decisions. We have seen growing levels of retailer engagement and
averaged 86 million requests per month on Auto Trader Connect services in the
period.
Over many years we have improved the quality of our proprietary data: we
acquired Kee Resources for vehicle taxonomy; have integrated build-level data
from manufacturers; have aggregated all the interactions on our platform; and
more recently have directly sourced the granular vehicle data required to
provide our own provenance or vehicle history checks. As part of our platform
strategy, we continue to integrate more and more lenders into our automotive
finance platform which underpins the finance journey on Auto Trader.
We built our data science team and have been working with Machine Learning and
Artificial Intelligence ('AI') over the last 10 years. These models underpin
most of the metrics we provide to our customers and car buyers, including
price flags, valuations, advertising performance, retail demand and supply and
our search algorithm. We have been experimenting with the latest generation of
large-language-models ('LLM's') and see great potential to leverage this
technology combined with our unique, proprietary data set to make the lives of
our retailers easier and to improve the experience for buyers on Auto Trader.
We have recently launched "Co-driver," a new suite of AI powered tools that
will significantly improve the consumer and retailer experience. The first two
products will focus on providing better vehicle descriptions for car buyers
and retailers, and improving the categorisation and navigation of vehicle
images, one of the biggest use cases on Auto Trader and a time-consuming part
of the stock management process for retailers.
Digital retailing
To provide buyers with a more trusted, transparent buying experience and to
support retailer performance, we are enabling more of the buying journey to be
completed online, on Auto Trader.
Our main focus has been to develop and scale our Deal Builder product for used
cars, where car buyers can carry out as much of the journey as they want on
Auto Trader, completing the rest of the transaction on the forecourt, over the
phone or through a combination of channels. We launched Deal Builder last
year, which uses Auto Trader technology to enable car buyers to get a
part-exchange valuation, apply for finance and to reserve a car online.
Launched as a small trial, we have increased the volume of customers to
c.1,500 retailers (September 2023: c.500) with over 55,000 cars live at the
end of September 2024 (September 2023: c.20,000). Over the past six months, we
have continued to improve the onsite experience and generated 23,000 deals in
the period, a more than 10x increase on the volume delivered in the same
period last year (H1 2024: c.2,100). Consumer feedback remains positive and
deals are converting at roughly double the rate of any other enquiry type,
with over half of deals being completed outside of retail hours, validating
that car buyers want to complete more of the car buying journey online at a
time convenient to them. We have commenced monetising customers in cohorts and
now have c.20% of customers paying for the product. The charging model is a
transaction fee (0.25%) linked to the price of the vehicle which is charged on
submission of a deal.
In parallel to Deal Builder, we are working to enable a digital retailing
journey for new cars. Throughout the period we have further integrated leasing
deals for cars, vans and pickups into the core Auto Trader search experience.
Our car leasing tab consolidates all available deals and provides a full
checkout journey on Auto Trader. The personal leasing market has been
constrained by tight supply, but in time, as fleets "catch-up" on orders not
fulfilled over the past four years we expect supply through this channel to
gradually improve. Autorama delivered 3,180 vehicles across the period (H1
2024: 4,593), with average commission and ancillary revenue per vehicle
delivered of £1,698 (H1 2024: £1,546). Our focus for Autorama has been on
building a platform from which we can scale profitably when the personal
leasing market sees growing volumes and more attractive consumer deals.
Being a responsible business
We apply a lot of focus to providing a great working environment for our
people, enabling them to do their best work for Auto Trader. 91% of people are
proud to work at Auto Trader (September 2023: 92%, March 2024: 97%). Our
employee-driven networks support women, ethnicity, LGBT+, wellbeing, early
careers, disability and neurodiversity, social mobility, family and age. They
have continued their impressive work and have supported many colleagues during
the period.
At the end of September 2024, women represented 44% of our organisation (March
2024: 44%) and 40% (March 2024: 42%) of leadership roles as defined by the
FTSE Women Leaders Review. We are committed to increasing the percentage of
ethnically diverse employees, who currently represent 18% of our organisation
(March 2024: 17%), with 8% of employees not disclosing their ethnicity. The
percentage of ethnically diverse employees in leadership remained consistent
at 6% (March 2024: 6%), which we are committed to increasing over time.
Following the AGM, our Board comprises six women and three men, with two from
an ethnically diverse background and a woman as Senior Independent Director.
We are committed to being net zero by 2040 and halving our carbon emissions by
2030, targets which have been validated by the Science Based Targets
initiative ('SBTi'). Initial calculations estimate our GHG emissions during
the six-month period to September 2024 to be c.45.4k tonnes of CO(2) across
Scopes 1, 2 and 3 (FY 2024: 98.9k tonnes). The majority of our emissions are
Scope 3, predominantly attributable to our suppliers and emissions relating to
the small number of vehicles sold by Autorama that pass through their balance
sheet.
The Board
At our AGM on 19 September 2024, Non-Executive Directors, David Keens and Jill
Easterbrook, did not stand for re-election having both served their third
three-year term. We are grateful for David and Jill's contribution as
Non-Executive Directors and highly effective Committee Chairs.
At the conclusion of the AGM, Geeta Gopalan who joined the Board on 1 May 2024
was appointed as Senior Independent Director and Remuneration Committee Chair,
and Amanda James who joined the Board on 1 July 2024 was appointed as Audit
Committee Chair.
Investor calendar
The Group's results for the full year ending 31 March 2025 will be announced
on 29 May 2025.
Financial Review
Group Results
H1 2025 H1 2024 Change
£m £m %
Revenue 302.5 280.5 8%
Operating costs (115.9) (117.2) 1%
Share of profit from joint ventures 1.8 1.3 38%
Group operating profit 188.4 164.6 14%
Group operating profit margin 62% 59% 3% pts
Group revenue increased by 8% to £302.5m (H1 2024: £280.5m) driven by Auto
Trader revenue which increased by 9% to £283.5m (H1 2024: £259.4m) with
Autorama contributing £19.0m (H1 2024: £21.1m). Group operating profit grew
by 14% to £188.4m (H1 2024: £164.6m).
H1 2025 H1 2024 Change
£m £m %
Auto Trader 197.5 184.9 7%
Autorama (2.8) (5.6) 50%
Group central costs - relating to Autorama acquisition (6.3) (14.7) 57%
Group operating profit 188.4 164.6 14%
Auto Trader operating profit increased by 7% to £197.5m (H1 2024: £184.9m),
which included £1.8m share of profit from joint ventures (H1 2024: £1.3m).
Autorama had an operating loss of £2.8m (H1 2024: loss of £5.6m). Group
central costs comprise an amortisation charge of £6.3m (H1 2024: £3.6m)
relating to the Autorama intangible assets acquired, and, in the prior period,
an £11.1m charge for the deferred consideration relating to the acquisition
of Autorama, which was fully settled in the period.
In October 2023, having accelerated the integration work between Autorama and
Auto Trader, we reviewed the useful economic life of the Vanarama brand and
shortened it to five years from the date of acquisition. This resulted in a
higher amortisation charge in H1 2025 versus the prior period.
H1 2025 H1 2024 Change
£m £m %
Operating profit 188.4 164.6 14%
Add back:
Depreciation and amortisation 10.3 7.7 34%
Share of profit from joint ventures (1.8) (1.3) 38%
Autorama deferred consideration - 11.1 (100%)
Adjusted EBITDA 196.9 182.1 8%
Adjusted earnings before interest, taxation, depreciation and amortisation,
share of profit from joint ventures and Autorama deferred consideration
increased by 8% to £196.9m (H1 2024: £182.1m). Group profit before tax
increased by 15% to £187.5m (H1 2024: £162.8m). Cash generated from
operations was £201.6m (H1 2024: £184.2m).
Auto Trader Results
Revenue increased to £283.5m (H1 2024: £259.4m), up 9% when compared to the
prior period. Trade revenue, which comprises revenue from Retailers, Home
Traders and other smaller revenue streams, increased by 9% to £254.1m (H1
2024: £233.0m).
H1 2025 H1 2024 Change
£m
£m
%
Retailer 239.3 220.7 8%
Home Trader 8.3 6.2 34%
Other 6.5 6.1 7%
Trade 254.1 233.0 9%
Consumer Services 23.0 20.1 14%
Manufacturer & Agency 6.4 6.3 2%
Auto Trader revenue 283.5 259.4 9%
Retailer revenue increased by 8% to £239.3m (H1 2024: £220.7m). The average
number of retailer forecourts advertising on our platform increased 2% to
13,986 (H1 2024: 13,710), with much of the growth coming from our smaller
Independent and Non-Car retailers. This growth has had a dilutive impact on
the calculation of our Average Revenue Per Retailer ('ARPR') growth.
Average Revenue Per Retailer ('ARPR') per month increased by 6.3%/£169 to
£2,852 (H1 2024: £2,683). The ARPR growth was predominantly driven by the
product and price levers, with smaller growth from the stock lever. The
breakdown was as follows:
· Price: Our price lever contributed growth of £79 (H1
2024: £146) to total ARPR as we delivered our annual pricing event for all
customers on 1 April 2024, which included additional products alongside a
like-for-like price increase.
· Stock: Our stock lever contributed growth of £10 (H1 2024:
decrease £32). This was higher than the same period last year, but reduced as
we moved through the period, with accelerating speed of sale and tightening
supply impacting listing volumes. The number of live cars advertised on Auto
Trader increased by 2% to 448,000 (H1 2024: 439,000). Within this new car
stock declined to an average of 20,000 (H1 2024: 23,000). Underlying used car
live car stock increased by 3% on average across the period to 428,000 (H1
2024: 416,000), although this increase came from a higher volume of private
listings. The stock lever is not impacted by private listings, but by the
number of retailer paid stock units.
· Product: Our product lever contributed growth of £80 (H1 2024:
£165) to total ARPR. More than half of this product growth was from the
latest module of Auto Trader Connect, providing retailers with Trended
Valuations and enhanced Retail Check functionality, which were included in
retailer packages from April 2024. Much of the remaining growth was from new
car where we increased the number of customers with the product.
Home Trader revenue increased by 34% to £8.3m (H1 2024: £6.2m). Other
revenue increased by 7% to £6.5m (H1 2024: £6.1m).
Consumer Services revenue increased by 14% in the period to £23.0m (H1 2024:
£20.1m). Private revenue, which is largely generated from individual sellers
who pay to advertise their vehicle on the Auto Trader marketplace, increased
by 12% to £15.2m (H1 2024: £13.6m). Motoring Services revenue increased 20%
to £7.8m (H1 2024: £6.5m).
Revenue from Manufacturer and Agency customers increased 2% to £6.4m (H1
2024: £6.3m).
Total costs increased 16% to £87.8m (H1 2024: £75.8m).
H1 2025 H1 2024 Change
£m £m %
People costs 46.6 39.3 19%
Marketing 11.2 12.3 (9%)
Other costs 21.7 21.4 1%
Depreciation and amortization 3.2 2.8 14%
Digital services tax 5.1 - -
Auto Trader costs 87.8 75.8 16%
People costs increased by 19% to £46.6m (H1 2024: £39.3m). The increase in
people costs was partly due to an increase in the average number of full-time
equivalent employees ('FTEs') to 1,122 (H1 2024: 1,032), as we continue to
invest in people to support the growth of the business. Within people costs,
share based payments was £6.8m (H1 2024: £3.5m), increasing 94% largely due
to the award of an all employee share scheme in November 2023. Underlying
salary costs also increased as we continue to invest in our people,
particularly in product, technology and data roles.
Marketing spend decreased by 9% to £11.2m (H1 2024: £12.3m) due to the
timing of campaigns during the period.
Other costs, which include data services, property related costs and other
overheads, increased 1% to £21.7m (H1 2024: £21.4m). The increase was
primarily due to higher IT costs and general inflationary increases.
Depreciation and amortisation increased by 14% to £3.2m (H1 2024: £2.8m).
As we are expecting to exceed the revenue threshold for the UK's Digital
Services Tax in financial year 2025, a cost for the six-month period of £5.1m
has been recognised (H1 2024: nil).
H1 2025 H1 2024 Change
£m £m %
Revenue 283.5 259.4 9%
Operating costs (87.8) (75.8) 16%
Share of profit from joint ventures 1.8 1.3 38%
Auto Trader operating profit 197.5 184.9 7%
Auto Trader operating profit (excl DST) 202.6 184.9 10%
Auto Trader operating profit margin 70% 71% (1%) pts
Auto Trader operating profit margin (excl DST) 71% 71% -
Auto Trader operating profit increased by 7% to £197.5m during the period (H1
2024: £184.9m), with operating profit margin declining slightly, due to the
inclusion of the Digital Services Tax, to 70% (H1 2024: 71%). Operating profit
growth and operating profit margin excluding Digital Services Tax was 10% and
71% respectively for the period.
Our share of profit generated by Dealer Auction, the Group's joint venture,
increased 38% to £1.8m (H1 2024: £1.3m) in the period due to increased
transaction volumes.
Autorama Results
H1 2025 H1 2024 Change
£m £m %
Vehicle & Accessory Sales 13.6 14.0 (3%)
Commission & Ancillary 5.4 7.1 (24%)
Autorama revenue 19.0 21.1 (10%)
Autorama revenue was £19.0m (H1 2024: £21.1m), with vehicle and accessory
sales contributing £13.6m (H1 2024: £14.0m), and commission and ancillary
revenue contributing £5.4m (H1 2024: £7.1m).
Total deliveries amounted to 3,180 units (H1 2024: 4,593), which comprised 841
cars (H1 2024: 1,572), 2,018 vans (H1 2024: 2,793) and 321 pickups (H1 2024:
228). Average commission and ancillary revenue per unit delivered increased to
£1,698 (H1 2024: £1,546) reflecting the vehicle mix in the period.
H1 2025 H1 2024 Change
£m £m %
Cost of goods sold 13.5 14.0 (4%)
People costs 3.9 6.7 (42%)
Marketing 1.9 2.6 (27%)
Other costs 1.7 2.1 (19%)
Depreciation and amortisation 0.8 1.3 (38%)
Autorama costs 21.8 26.7 (18%)
The Autorama business delivered c.430 (H1 2024: c.565) vehicles which were
temporarily taken on balance sheet in the period. This represented 14% (H1
2024: 12%) of total vehicles delivered in the period. The cost of these
vehicles was taken through cost of goods sold, with the corresponding revenue
in vehicle and accessory sales. People costs of £3.9m (H1 2024: £6.7m)
related to the 130 FTEs (H1 2024: 188) employed on average through the period.
Marketing in the period was £1.9m (H1 2024: £2.6m). Other costs of £1.7m
(H1 2024: 2.1m) include IT services, property costs, people-related costs and
other overheads. Depreciation and amortisation totalled £0.8m (H1 2024:
£1.3m).
The Autorama operating segment made an operating loss of £2.8m (H1 2024:
£5.6m).
H1 2025 H1 2024 Change
£m £m %
Revenue 19.0 21.1 (10%)
Costs (21.8) (26.7) (18%)
Operating loss (2.8) (5.6) 50%
Group net finance costs
Group net finance costs decreased to £0.9m (H1 2024: £1.8m). Interest costs
on the Group's Syndicated Revolving Credit Facility ('Syndicated RCF')
totalled £0.7m (H1 2024: £1.5m). At 31 September 2024, the Group had drawn
£nil of its available facility (30 September 2023: £52.0m). Other finance
costs comprised amortisation of debt issue costs of £0.3m (H1 2024: £0.3m),
vehicle stocking loan interest of £0.2m (H1 2024: £0.1m) and interest costs
relating to leases of £nil (H1 2024: £0.1m). This was offset by interest
receivable on cash and cash equivalents of £0.3m (H1 2024: £0.2m).
Taxation
Profit before taxation increased by 15% to £187.5m (H1 2024: £162.8m). The
Group tax charge of £47.9m (H1 2024: £46.0m) represents an effective tax
rate of 25.5% (H1 2024: 28.1%). This is marginally higher than the average
standard UK rate of 25% (H1 2024: 25%) due to non-deductible expenses.
At our full year results in June 2024, we stated that we expected the Group to
exceed the threshold for in-scope revenue for UK Digital Services Tax ('UK
DST') in financial year 2025. This has resulted in an operating expense of
£5.1m in the period, equivalent to 2% of the Group's in-scope revenue. We had
previously commented that the UK Government continues to work towards
implementing a global two-pillar tax solution addressing the tax challenges
arising from the digitalisation of the economy. Pillar Two came into effect
for accounting periods beginning on or after 31 December 2023, but the
timeline for finalising the multilateral convention that would implement
Pillar One is still not certain and no recent updates have been received.
Earnings per share
Basic earnings per share increased by 22% to 15.56 pence (H1 2024: 12.74
pence) based on a weighted average number of ordinary shares in issue of
896,891,990 (H1 2024: 916,651,179). Diluted earnings per share of 15.52 pence
(H1 2024: 12.71 pence) also increased by 22%, based on 899,499,244 shares (H1
2024: 918,647,739) which takes into account the dilutive impact of outstanding
share awards
H1 2025 H1 2024 Change
£m
£m
%
Net income 139.6 116.8 20%
Autorama deferred consideration - 11.1 (100%)
Adjusted Net income 139.6 127.9 9%
Adjusted earnings per share (pence) 15.56 13.96 11%
Adjusted earnings per share, before Autorama deferred consideration and the
net tax effect of this, increased by 11% to 15.56 pence (H1 2024: 13.96
pence).
Cash flow and net bank debt
Cash generated from operations increased to £201.6m (H1 2024: £184.2m) as a
result of the increase in operating profit. Corporation tax payments increased
to £50.2m (H1 2024: £45.1m). Net cash generated from operating activities
was £151.4m (H1 2024: £139.1m).
As at 30 September 2024, the Group had net cash of £15.1m (30 September 2023:
net bank debt of £27.3m). At the period end, the Group had drawn £nil of its
Syndicated RCF (30 September 2023: £52.0m) and held cash and cash equivalents
of £15.1m (30 September 2023: £24.7m).
Capital structure and dividends
The final dividend for the year ended 31 March 2024 of 6.4 pence per share (H1
2024: 5.6 pence per share) was paid on 27 September 2024, totalling £57.3m
(H1 2024: £51.3m). During the period, a total of 8.5m shares (H1 2024: 10.4m)
were purchased for a consideration of £64.9m (H1 2024: £65.8m) before
transaction costs of £0.3m (H1 2024: £0.3m). The average price per share was
764.5p (H1 2024: 632.6p).
For H1 2025, the Board has declared an interim dividend of 3.5 pence per
share. The interim dividend will be paid on 25 January 2025 to members on the
register on 3 January 2025.
The Group's long-term capital allocation policy remains unchanged: continuing
to invest in the business enabling it to grow while returning around one third
of net income to shareholders in the form of dividends. Following these
activities any surplus cash will be used to continue our share buyback
programme.
Going concern
The Group generated significant cash from operations during the period. At 30
September 2024 the Group had £nil drawn of its £200.0m unsecured Syndicated
RCF and had cash balances of £15.1m. The Group has a strong balance sheet and
flexibility in terms of uses of cash to manage increased economic uncertainty
and higher interest rates. The £200.0m Syndicated RCF is committed until
February 2029. Based on the facilities available and current financial
projections for the next 12 months the Directors have concluded that it is
appropriate to prepare the financial statements on a going concern basis.
Principal risk and uncertainties
The Board has undertaken a review of the Principal Risks and Uncertainties
that Auto Trader faces as it works towards achieving its strategic objectives.
The Board has also considered the Group's risk appetite and the key
mitigations which are applied against each of the Group's Principal Risk.
The Board's review of our risks and uncertainties has included an evaluation
of the new and emerging areas of risk. The most notable emerging areas of risk
identified by the Board are:
· The Zero Emissions Vehicle mandate applies for the first time in
2024. It requires 22% of new vehicles sold in the UK to be zero emissions,
rising to 28% in 2025. However, between January and September 2024 EVs made up
18% of new vehicle registrations. There is a risk that the ZEV mandate will be
missed which would lead to fines being imposed upon OEMs. Alternatively, we
may see OEMs restricting the supply of ICE vehicles in order to reduce any
fines and this would lead to reduced pipeline of used ICE vehicles in the
coming years.
· The geo-political landscape is sadly becoming more uncertain and
volatile. Conflict in the Ukraine continues and conflict in the Middle East
has escalated. First and foremost, we are offering support to all our
employees who might be affected by geo-political events and conflicts. We have
also considered the indirect impacts of these conflicts which might include
increased oil prices leading to heightened costs, inflation, and potentially
increased EV demand.
· The FCA investigation into historic Discretionary Commission
Arrangements ('DCAs') on automotive finance deals is not likely to be
completed until late spring 2025. The long-term results of this investigation
are uncertain, however a recent court ruling indicated that lenders in the
market owe a fiduciary duty to consumers and that compliance with the FCA
regulations is not necessarily sufficient to comply with the law.
The Board are satisfied that in all cases the new and emerging risks which we
have identified fall within the scope of the disclosures captured within the
Principal Risks and Uncertainties section of the 2024 Annual Report and
Accounts. Those disclosures remain valid and therefore this document should
be read in conjunction with pages 53 to 58 of the 2024 Annual Report and
Accounts.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK;
· the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Falex.kpmg.com%2FAROWeb%2Fdocument%2Flfc%2Ffind%2FUK_XLNUK_FSA_DR_DTR_BODY_para4_2_7R&data=05%7C01%7CDylan.Hull%40autotrader.co.uk%7C433347eddc9e479a7b9308daaac6b0a4%7C926f3743f3d24b8a816818cfcbe776fe%7C0%7C0%7C638010067645338957%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=tRbzSUuB37dF0q17DK6%2FV0rZ%2FiJXqQHrx85pcJ3p%2B%2BY%3D&reserved=0)
of the Disclosure Guidance and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Falex.kpmg.com%2FAROWeb%2Fdocument%2Flfc%2Ffind%2FUK_XLNUK_FSA_DR_DTR_BODY_para4_2_8R&data=05%7C01%7CDylan.Hull%40autotrader.co.uk%7C433347eddc9e479a7b9308daaac6b0a4%7C926f3743f3d24b8a816818cfcbe776fe%7C0%7C0%7C638010067645338957%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=fmqRAz89I5sLC4zxBN6ykizDiWpTHuiDwvQxorT9XpE%3D&reserved=0)
of the Disclosure Guidance and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so
Nathan Coe Jamie Warner
Chief Executive Officer Chief Financial Officer
7 November 2024 7 November 2024
Consolidated INTERIM income statement
For the six months ended 30 september 2024
Year to
March
6 months to September 6 months to September 2024
2024 2023 £m
£m £m
Note
Revenue 3 302.5 280.5 570.9
Operating costs (115.9) (117.2) (225.0)
Share of profit from joint ventures, net of tax 1.8 1.3 2.8
Operating profit 188.4 164.6 348.7
Net finance costs 4 (0.9) (1.8) (3.5)
Profit before taxation 187.5 162.8 345.2
Taxation 5 (47.9) (46.0) (88.3)
Profit for the period attributable to equity holders of the 139.6 116.8 256.9
parent
Earnings per share:
Basic EPS (pence) 6 15.56 12.74 28.15
Diluted EPS (pence) 6 15.52 12.71 28.07
Consolidated INTERIM statement of comprehensive income
For the six months ended 30 september 2024
Year to
March
6 months to September 6 months to September 2024
2024 2023 £m
£m £m
Profit for the period 139.6 116.8 256.9
Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations, net of tax (0.3) (0.1) (0.1)
Other comprehensive income for the period, net of tax (0.3) (0.1) (0.1)
Total comprehensive income for the period attributable to 139.3 116.7 256.8
equity holders of the parent
Consolidated INTERIM balance sheet
At 30 september 2024
September March
September 2023 2024
2024
Note £m £m £m
Assets
Non-current assets
Intangible assets 7 480.0 496.1 487.7
Property, plant and equipment 8,9 13.3 15.9 14.9
Deferred taxation assets 0.1 - -
Retirement benefit surplus 12 0.3 0.5 0.6
Net investments in joint ventures 50.0 50.6 48.2
Other investments 1.3 2.3 1.3
545.0 565.4 552.7
Current assets
Inventory 3.3 4.2 2.6
Trade and other receivables 10 85.7 79.7 83.3
Current income tax assets 0.8 - 0.7
Cash and cash equivalents 15.1 24.7 18.7
104.9 108.6 105.3
Total assets 649.9 674.0 658.0
Equity and liabilities
Equity attributable to equity holders of the parent
Share capital 16 9.0 9.3 9.2
Share premium 182.6 182.6 182.6
Retained earnings 1,437.2 1,400.8 1,420.5
Own shares held 17 (24.8) (23.7) (31.3)
Capital reorganisation reserve (1,060.8) (1,060.8) (1,060.8)
Capital redemption reserve 1.6 1.3 1.4
Other reserves 30.7 30.6 30.7
Total equity 575.5 540.1 552.3
Liabilities
Non-current liabilities
Borrowings 14 - 49.8 27.7
Provisions 1.6 1.2 1.6
Lease liabilities 9 1.6 3.6 2.4
Deferred income 7.5 8.0 7.8
Deferred taxation liabilities - 5.0 2.9
10.7 67.6 42.4
Current liabilities
Trade and other payables 11 60.7 60.4 60.1
Current income tax liabilities - 1.7 -
Provisions 0.8 0.7 0.8
Lease liabilities 9 2.2 2.4 2.4
Borrowings 14 - 1.1 -
63.7 66.3 63.3
Total liabilities 74.4 133.9 105.7
Total equity and liabilities 649.9 674.0 658.0
Consolidated INTERIM statement of changes in equity
For the six months ended 30 september 2024
Share Share Retained Own shares Capital Capital redem reserve Other Total
Capital premium earnings held reorg reserves Equity
reserve
£m £m £m £m £m £m £m £m
Balance at March 2023 9.3 182.6 1,390.3 (26.0) (1,060.8) 1.2 30.7 527.3
Profit for the period - - 116.8 - - - - 116.8
Other comprehensive income:
Remeasurements of post-employment - - (0.1) - - - - (0.1)
benefit obligations
Total comprehensive income, net of tax - - 116.7 - - - - 116.7
Transactions with owners:
Employee share schemes, value of employee services - - 14.0 - - - - 14.0
Tax impact of employee share schemes - - (0.7) - - - - (0.7)
Purchase of own shares for cancellation (0.1) - (66.1) - - 0.1 - (66.1)
Exercise of share-based incentives - - (2.1) 2.3 - - - 0.2
Issue of ordinary shares 0.1 - - - - - (0.1) -
Dividends paid - - (51.3) - - - - (51.3)
Total transactions with owners, recognised directly in equity - - (106.2) 2.3 - 0.1 (0.1) (103.9)
Balance at September 2023 9.3 182.6 1,400.8 (23.7) (1,060.8) 1.3 30.6 540.1
Profit for the period - - 140.1 - - - - 140.1
Other comprehensive income:
Remeasurements of post-employment - - - - - - - -
benefit obligations
Total comprehensive income, net of tax - - 140.1 - - - - 140.1
Transactions with owners:
Employee share schemes, value of employee services - - 3.9 - - - - 3.9
Tax impact of employee share schemes - - 0.4 - - - - 0.4
Purchase of own shares for treasury - - - (11.1) - - - (11.1)
Purchase of own shares for cancellation (0.1) - (93.6) - - 0.1 - (93.6)
Exercise of share-based incentives - - (1.9) 3.5 - - - 1.6
Issue of ordinary shares - - (0.1) - - - 0.1 -
Dividends paid - - (29.1) - - - - (29.1)
Total transactions with owners, recognised directly in equity (0.1) - (120.4) (7.6) - 0.1 0.1 (127.9)
Balance at March 2024 9.2 182.6 1,420.5 (31.3) (1,060.8) 1.4 30.7 552.3
Profit for the period - - 139.6 - - - - 139.6
Other comprehensive income:
Remeasurements of post-employment - - (0.3) - - - - (0.3)
benefit obligations
Total comprehensive income, net of tax - - 139.3 - - - - 139.3
Transactions with owners:
Employee share schemes, value of employee services - - 5.5 - - - - 5.5
Tax impact of employee share schemes - - 0.7 - - - - 0.7
Purchase of own shares for cancellation (0.2) - (65.2) - - 0.2 - (65.2)
Exercise of share-based incentives - - (6.3) 6.5 - - - 0.2
Dividends paid - - (57.3) - - - - (57.3)
Total transactions with owners, recognised directly in equity (0.2) - (122.6) 6.5 - 0.2 - (116.1)
Balance at September 2024 9.0 182.6 1,437.2 (24.8) (1,060.8) 1.6 30.7 575.5
Consolidated statement of cash flows
For the six months ended 30 september 2024
Year to
March
6 months to September 6 months to September 2024
2024 2023
Note £m £m £m
Cash flows from operating activities
Cash generated from operations 15 201.6 184.2 379.0
Income taxes paid (50.2) (45.1) (91.5)
Net cash generated from operating activities 151.4 139.1 287.5
Cash flows from investing activities
Purchases of intangible assets - (0.6) (0.2)
Purchases of property, plant and equipment (1.0) (2.4) (3.6)
Proceeds from sale of property, plant and equipment - - 0.2
Dividends received from joint ventures - - 3.9
Interest received on cash and cash equivalents 0.3 - 0.5
Proceeds on disposal of shares in investment entities - - 1.0
Net cash used in investing activities (0.7) (3.0) 1.8
Cash flows from financing activities
Dividends paid to Company's shareholders 13 (57.3) (51.3) (80.4)
Drawdown of Syndicated revolving credit facility 14 - 29.0 57.0
Repayment of Syndicated revolving credit facility 14 (30.0) (37.0) (87.0)
Repayment of other debt - - (1.1)
Payment of refinancing fees - (0.2) (0.5)
Payment of interest on borrowings (0.8) (1.2) (3.4)
Payment of lease liabilities (1.1) (1.4) (2.7)
Purchase of own shares for cancellation 17 (64.9) (65.8) (158.9)
Purchase of own shares for treasury 17 - - (11.0)
Payment of fees on purchase of own shares 17 (0.3) (0.3) (0.9)
Contributions to defined benefit pension scheme 12 (0.1) - (0.1)
Proceeds from exercise of share-based incentives 0.2 0.2 1.8
Net cash used in financing activities (154.3) (128.0) (287.2)
Net (decrease)/increase in cash and cash equivalents (3.6) 8.1 2.1
Cash and cash equivalents at beginning of period 18.7 16.6 16.6
Cash and cash equivalents at end of period 15.1 24.7 18.7
Notes to the consolidated financial statements
1. General information
Auto Trader Group plc ('the Company') is a company incorporated in the United
Kingdom and its registered office is 4th Floor, 1 Tony Wilson Place,
Manchester, M15 4FN.
These condensed Consolidated interim financial statements have been prepared
as at, and for the six months ended, 30 September 2024. The comparative
financial information presented has been prepared as at, and for the six
months ended, 30 September 2023.
The condensed Consolidated interim financial information presented as at, and
for the six months ended, 30 September 2024 comprise the Company and its
subsidiaries (together referred to as the Group). The Consolidated financial
statements of the Group as at, and for the year ended, 31 March 2024 are
available on request from the Company's registered office and via the
Company's website.
These condensed Consolidated interim financial statements are unaudited but
have been reviewed by the Auditor whose report is set out on pages 36-37. They
have been prepared in accordance with the Disclosure and Transparency Rules of
the Financial Conduct Authority and with IAS 34, "Interim Financial Reporting"
as adopted for use in the UK. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the Consolidated financial statements of the Group as at and
for the year ended 31 March 2024 which were prepared in accordance with
UK-adopted international accounting standards, in conformity with the
requirements of the Companies Act 2006 and applicable law.
As required by the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority, the condensed set of financial statements has been prepared
applying the accounting policies and presentation that were applied in the
preparation of the company's published Consolidated financial statements for
the year ended 31 March 2024.
The comparative financial information for the year ended 31 March 2024
included in this interim statement of results does not constitute statutory
accounts within the meaning of Section 434 of the Companies Act 2006 (the
'Act'). The statutory accounts for the year ended 31 March 2024 have been
reported on by the Company's Auditor and were delivered to the Registrar of
Companies following the Company's Annual General Meeting. The auditor's report
was (i) unqualified, (ii) did not include a reference to any matters to which
the auditor drew attention by way of emphasis without qualifying their report
and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
Judgements and estimates
The preparation of the condensed Consolidated interim financial statements
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
In preparing these condensed Consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the Consolidated financial statements for the year ended 31
March 2024.
Going concern
During the period ended 30 September 2024 the Group has continued to generate
significant cash from operations. The Group has an overall positive net asset
position and had cash balances of £15.1m at 30 September 2024 (30 September
2023: £24.7m).
The Group has access to a Syndicated revolving credit facility (the
'Syndicated RCF'). At 30 September 2024 the Group had £nil (30 September
2023: £52.0m) drawn of its £200.0m Syndicated RCF. The facility is available
until February 2029.
The combination of significant free cash flow and the discretionary nature of
dividend payments and share buybacks provide the Group with significant
liquidity and ability to comply with the RCF's financial covenants. On the
basis of facilities available and current financial projections for the next
twelve months, the Directors have concluded that it is appropriate to prepare
the condensed interim financial statements on a going concern basis.
Changes in accounting policies
There are no material changes in accounting policies applied in these interim
financial statements to those accounting policies applied in the Group's
Consolidated financial statements as at and for the year ended 31 March 2024.
Taxes on income in the interim periods are accrued using the effective tax
rate that would be applicable to expected total annual profit or loss.
2. Segmental information
IFRS 8 'Operating segments' requires the Group to determine its operating
segments based on information which is provided internally. Based on the
internal reporting information and management structures within the Group, it
has been determined that there are two operating segments (September 2023: two
operating segments). The Group's reportable operating segments have therefore
been identified as follows:
· Auto Trader - includes the results of Auto Trader and AutoConvert in
respect of online marketplace advertising of motor vehicles and other related
products and services in the digital automotive marketplace including profit
from the Dealer Auction joint venture.
· Autorama - the results of Autorama in respect of a marketplace for
leasing new vehicles and other related products and services.
Management has determined that there are two operating segments in line with
the nature in which the Group is managed. The reports reviewed by the
Operational Leadership Team ('OLT'), which is the chief operating
decision-maker ('CODM') for both segments, splits out operating performance by
segment. The OLT is made up of the Executive Directors and Key Management and
is responsible for the strategic decision-making of the Group. Revenue and
cost streams for each operating segment are largely independent in the
reporting period.
The OLT primarily uses the measures of Revenue and Operating profit to assess
the performance of each operating segment. The revenue from external parties
reported to the OLT is measured in a manner consistent with that in the income
statement. There are no inter-segment revenues in the current or comparative
periods.
Analysis of the Groups' revenue and results for both reportable segments, with
a reconciliation to Group profit before tax is shown below:
6 months to September 2024 Auto Trader segment Autorama segment Group Group
central costs
£m £m
£m
£m
Total segment revenue 283.5 19.0 - 302.5
People costs (46.6) (3.9) - (50.5)
Marketing (11.2) (1.9) - (13.1)
Costs of goods sold - (13.5) - (13.5)
Digitals services tax (5.1) - - (5.1)
Other costs (21.7) (1.7) - (23.4)
Depreciation & amortisation (3.2) (0.8) (6.3) (10.3)
Total segment costs (87.8) (21.8) (6.3) (115.9)
Share of profit from joint ventures 1.8 - - 1.8
Total segment operating profit/(loss) 197.5 (2.8) (6.3) 188.4
Finance costs - net (0.9)
Profit before tax 187.5
Group central costs which are not allocated within either of the segment
operating profit/(loss) reported to the CODM comprise:
(i) Depreciation and amortisation: £6.3m (September 2023: £3.6m; March
2024: £10.0m) of amortisation expense relating to the fair value of
intangible brand and technology assets acquired in the Group's business
combination of Autorama.
(ii) People costs: in the September 2023 and March 2024 comparative periods, a
£10.4m share-based payment expense relating to the Group shares issued as
part of the deferred consideration for Autorama which was fully settled in the
prior period. A further £0.7m was settled in cash.
6 months to September 2023 Auto Trader segment Autorama segment Group Group
central costs
£m £m
£m
£m
Total segment revenue 259.4 21.1 - 280.5
People costs (39.3) (6.7) (11.1) (57.1)
Marketing (12.3) (2.6) - (14.9)
Costs of goods sold - (14.0) - (14.0)
Other costs (21.4) (2.1) - (23.5)
Depreciation & amortisation (2.8) (1.3) (3.6) (7.7)
Total segment costs (75.8) (26.7) (14.7) (117.2)
Share of profit from joint ventures 1.3 - - 1.3
Total segment operating profit/(loss) 184.9 (5.6) (14.7) 164.6
Finance costs - net (1.8)
Profit before tax 162.8
Year to March 2024 Auto Trader segment Autorama segment Group Group
central costs
£m £m
£m
£m
Total segment revenue 529.7 41.2 - 570.9
People costs (81.5) (10.9) (11.1) (103.5)
Marketing (22.3) (4.0) - (26.3)
Costs of goods sold - (28.2) - (28.2)
Other costs (44.2) (4.5) - (48.7)
Depreciation & amortisation (5.9) (2.4) (10.0) (18.3)
Total segment costs (153.9) (50.0) (21.1) (225.0)
Share of profit from joint ventures 2.8 - - 2.8
Total segment operating profit/(loss) 378.6 (8.8) (21.1) 348.7
Finance costs - net (3.5)
Profit before tax 345.2
3. Revenue
The Group's revenue is derived from contracts with customers. All revenues
were earned from activities and customers in the United Kingdom.
In the following table, the Group's revenue is detailed by customer type. This
level of detail is consistent with that used by management to assist in the
analysis of the Group's revenue-generating trends.
September September March
2024 2023 2024
£m £m £m
Retailer 239.3 220.7 450.0
Home Trader 8.3 6.2 13.4
Other 6.5 6.1 12.3
Trade 254.1 233.0 475.7
Consumer Services 23.0 20.1 39.6
Manufacturer and Agency 6.4 6.3 14.4
Autorama 19.0 21.1 41.2
Total revenue 302.5 280.5 570.9
4. Net finance costs
September September March
2024 2023 2024
£m £m £m
On bank loans and overdrafts 0.7 1.5 3.0
Amortisation of debt issue costs 0.3 0.3 0.6
Interest unwind on lease liabilities - 0.1 0.1
Interest on vehicle stocking loan 0.2 0.1 0.3
Interest receivable on cash and cash equivalents (0.3) (0.2) (0.5)
Total net finance costs 0.9 1.8 3.5
5. Income taxes
September September March
2024 2023 2024
£m £m £m
Total income tax expense 47.9 46.0 88.3
The taxation charge recognised is based on management's best estimate of the
effective tax rate for the full year of 25.5% (September 2023: 28.1%) applied
to the profit before taxation of the interim period. The taxation charge for
the period is higher than (2023: higher than) the standard rate of UK
corporation tax of 25% (September 2023: 25%) due to non-deductible expenses
for tax.
6. Earnings per share
Basic earnings per share is calculated using the weighted average number of
ordinary shares in issue during the period, excluding those held in treasury
and by the Employee Share Option Trust ('ESOT'), based on the profit for the
period attributable to shareholders.
Weighted average number Total Pence
of ordinary shares earnings per share
£m
Six months ended September 2024
Basic EPS 896,681,990 139.6 15.56
Diluted EPS 899,449,245 139.6 15.52
Six months ended September 2023
Basic EPS 916,651,179 116.8 12.74
Diluted EPS 918,647,739 116.8 12.71
Year ended March 2024
Basic EPS 912,582,172 256.9 28.15
Diluted EPS 915,302,568 256.9 28.07
The difference between the basic and diluted weighted average number of shares
represents the dilutive impact of the Share Incentive Plan, Performance Share
Plan, Deferred Annual Bonus, Single Incentive Plan Award and Sharesave scheme,
which are conditional on a service condition and, in the comparative periods,
the dilutive impact of shares issued as deferred consideration for the
acquisition of Autorama, which were conditional on a service condition.
The average number of shares in issue during the period is reconciled to the
basic and diluted weighted average number of shares below:
6 months ended 30 September 2024 6 months ended 30 September 2023
Weighted average ordinary shares in issue 901,529,820 921,172,753
Less weighted effect of ordinary shares held in treasury (4,541,376) (4,183,560)
Less weighted effect of shares held in the ESOT (306,454) (338,014)
Weighted average number of shares for basic EPS 896,681,990 916,651,179
Dilutive impact of share options outstanding 2,767,254 1,996,560
Weighted average number of shares for diluted EPS 899,449,244 918,647,739
The average market value of the Group's shares, for the purpose of calculating
the dilutive effect of share-based incentives, was based on quoted market
prices for the period during which the share-based incentives were
outstanding.
7. Intangible assets
Goodwill Software & website Brand Other Total
development costs
£m £m £m £m £m
Opening balance at 1 April 2024 427.6 14.6 36.0 9.5 487.7
Additions - - - - -
Amortisation charge - (1.4) (5.6) (0.7) (7.7)
Closing balance at 30 September 2024 427.6 13.2 30.4 8.8 480.0
Goodwill Software & website Brand Other Total
development costs
£m £m £m £m £m
Opening balance at 1 April 2023 427.6 17.4 43.9 12.1 501.0
Additions - 0.6 - - 0.6
Amortisation charge - (1.6) (2.4) (1.5) (5.5)
Closing balance at 30 September 2023 427.6 16.4 41.5 10.6 496.1
At 30 September 2024, the Group assessed indicators over the impairment of
goodwill relating to its Digital and Autorama cash generating units. No
indicators were identified at this date. A full annual impairment test will be
carried out by the financial year end in line with IAS 36: Impairment of
non-financial assets.
In the prior period, the useful economic life of the 'Vanarama' brand was
reduced from ten years to five years from the date of acquisition. This change
in accounting estimate was applied prospectively from 1 October 2023 in line
with IAS. 38: Intangible assets. The change was the result of the faster than
anticipated integration of Autorama. The impact of this can be seen in the
Brand amortisation charge for the period of £5.6m (H1 2024: £2.4m).
8. Property, plant and equipment
Land, buildings and leasehold improvements Motor vehicles Work in progress Total
Office equipment
£m £m £m £m £m
Opening balance at 1 April 2024 10.8 3.7 0.4 - 14.9
Additions 0.2 0.6 0.2 0.5 1.5
Disposals (0.1) (0.1) (0.3) - (0.5)
Depreciation charge (1.7) (0.8) (0.1) - (2.6)
Closing balance at 30 September 2024 9.2 3.4 0.2 0.5 13.3
Land, buildings and leasehold improvements Motor vehicles Work in progress Total
Office equipment
£m £m £m £m £m
Opening balance at 1 April 2023 11.3 3.8 0.8 - 15.9
Additions 1.5 0.9 0.1 - 2.5
Disposals (0.2) - (0.1) - (0.3)
Depreciation charge (1.3) (0.7) (0.2) - (2.2)
Closing balance at 30 September 2023 11.3 4.0 0.6 - 15.9
Included within property, plant and equipment are £3.9m (September 2023:
£5.5m) of assets recognised as leases under IFRS 16. During the period a
depreciation expense of £2.6m (September 2023: £2.2m) has been recorded in
operating costs.
During the period we announced the relocation of our head office. The
associated capital expenditure to date of £0.5m can be seen in Work in
Progress.
9. Leases
The Group has right-of-use assets which comprise of property and motor
vehicles which are held within property, plant and equipment. Information
about leases for which the Group is a lessee is presented below.
Analysis of property, plant and equipment between owned and leased assets September September March
2024 2023 2024
£m £m £m
Property plant and equipment owned 9.4 10.4 9.9
Right-of-use assets 3.9 5.5 5.0
13.3 15.9 14.9
Right-of-use assets
Office equipment Total
Property Vehicles
£m £m £m £m
Opening balance at 1 April 2024 4.4 0.4 0.2 5.0
Additions - 0.2 0.1 0.3
Disposals - (0.2) - (0.2)
Depreciation (1.0) (0.1) (0.1) (1.2)
Closing balance at 30 September 2024 3.4 0.3 0.2 3.9
Property Vehicles Office equipment Total
£m £m £m £m
Opening balance at 1 April 2023 5.8 0.5 0.2 6.5
Additions - 0.1 - 0.1
Depreciation (0.9) (0.2) - (1.1)
Closing balance at 30 September 2023 4.9 0.4 0.2 5.5
Lease liabilities September September March
2024 2023 2024
£m £m £m
Current 2.2 2.4 2.4
Non-current 1.6 3.6 2.4
Total 3.8 6.0 4.8
10. Trade and other receivables
September September March
2024 2023 2024
£m £m £m
Trade receivables (invoiced) 31.7 31.1 32.7
Net accrued income 44.4 42.7 42.8
Trade receivables (total) 76.1 73.8 75.5
Prepayments 9.2 5.6 6.8
Other receivables 0.4 0.3 1.0
Total 85.7 79.7 83.3
11. Trade and other payables
September September March
2024 2023 2024
£m £m £m
Trade payables 4.0 3.6 3.9
Accruals 14.0 20.7 17.7
Other taxes and social security 25.9 20.4 25.2
Deferred income 6.0 6.5 7.3
Digital services tax 5.1 - -
Vehicle stocking loan 3.6 4.3 2.1
Other payables 1.9 4.6 3.7
Accrued interest payable 0.2 0.3 0.2
Total 60.7 60.4 60.1
12. Retirement benefit obligations
The Group operates several pension schemes in the UK. All except one are
defined contribution schemes.
Defined contribution scheme
In the period, the pension contributions to the Group's defined contribution
scheme amounted to £2.3m (September 2023: £1.9m; March 2024: £4.1m). At 30
September 2024, £0.8m (September 2023: £0.7m; March 2024: £0.7m) of pension
contributions were outstanding relating to the Group's defined contribution
scheme.
Defined benefit scheme
The defined benefit pension scheme provides benefits based on final
pensionable pay. The scheme has been closed to future members since 30 April
2006 and there are no remaining active members within the scheme. New
employees after that date have been offered membership of the Group's defined
contribution scheme.
In October 2022, the scheme purchased a bulk annuity policy (known as a
buy-in) from Just Retirement Limited ('Just Retirement') for £15.4m, which
was funded by a £1.0m contribution by the Company along with existing scheme
assets. This policy secured the full benefits of all scheme members, which as
at the remeasurement date amounted to £13.7m. Given the financial strength of
Just Retirement, this buy-in substantively removes the risk of further
contributions being required from the Company to provide benefits to members,
beyond those noted below.
The most recent actuarial valuation of the defined benefit obligations was
performed as at 30 September 2024 by a qualified independent actuary. The
amounts recognised in the Consolidated balance sheet are determined as
follows:
September September March
2024 2023 2024
£m £m £m
Present value of funded obligations 12.6 12.4 13.4
Fair value of plan assets (12.9) (12.9) (14.0)
Net asset recognised in the Consolidated balance sheet (0.3) (0.5) (0.6)
During the year ending 31 March 2020, the Trustees of the scheme sought legal
advice which concluded that the Company has an unconditional right to a refund
of surplus from the scheme, if the scheme were to be run-off until the final
beneficiary died. As a result, the Group has concluded that the recognition
restrictions of IFRIC14 do not apply, and therefore has recognised the
accounting surplus of £0.3m and an associated deferred tax liability of
£0.1m in the Consolidated balance sheet.
No amounts were charged to the Consolidated income statement in the current
and prior periods.
The amounts recognised in the Consolidated statement of comprehensive income
are as follows:
September September March
2024 2023 2024
£m £m £m
Return on Scheme assets recognised in net interest 0.9 1.3 0.5
Actuarial gains due to changes in assumptions (0.5) (1.7) (0.7)
Actuarial losses due to liability experience - 0.5 0.3
Deferred tax on surplus (0.1) - -
Total amounts recognised within the Consolidated statement of 0.3 0.1 0.1
comprehensive income
Movements during the period in the post-employment defined benefit obligations
are set out as below:
September September March
2024 2023 2024
£m £m £m
At beginning of period (0.6) (0.5) (0.5)
Past service cost - - -
Contributions paid to scheme (0.1) - (0.1)
Remeasurement and experience losses 0.4 - -
Closing post-employment benefit obligation (0.3) (0.5) (0.6)
13. Dividends
Dividends declared and paid in the period were as follows:
September 2024 September 2023
Pence per share £m Pence per share £m
2024 final dividend paid 6.4 57.3 - -
2023 final dividend paid - - 5.6 51.3
Total 6.4 57.3 5.6 51.3
An interim dividend of 3.5 pence per share for the six months to September
2024 (September 2023: 3.2 pence per share) has been declared by the Directors,
totalling £31.5m (September 2023: £29.5m) based on the number of shares
eligible for the distribution as at 30 September 2024. The interim dividend is
payable on 24 January 2025 to shareholders on the register at the close of
business on 3 January 2025. No provision has been made for the interim
dividend and there are no income tax consequences.
14. Borrowings
September September March
2024 2023 2024
Non-current £m £m £m
Syndicated RCF gross of unamortised debt issue cost - 52.0 30.0
Unamortised debt issue costs on Syndicated RCF - (2.2) (2.3)
Total borrowings - 49.8 27.7
September September March
2024 2023 2024
Current £m £m £m
Loan from other investment - 1.1 -
Total - 1.1 -
Total borrowings - 50.9 27.7
Unamortised debt issue costs on the Syndicated RCF, which are now within
Prepayments in 2024, reduced to £2.0m in the year (September 2023: £2.2m).
Borrowings are repayable as follows:
September September March
2024 2023 2024
£m £m £m
Less than one year - 1.1 -
Within two to five years - 52.0 30.0
Total - 53.1 30.0
The carrying amounts of borrowings approximate their fair values.
Syndicated revolving credit facility ('Syndicated RCF')
The Group has access to a £200.0m unsecured Syndicated RCF. In February 2024,
the Group extended the term of the Syndicated RCF by one year to February 2029
plus an additional one-year extension option with no tranche terminations.
There is no requirement to settle all or part of the facility before the
termination date.
The Syndicated RCF has financial covenants linked to interest cover and the
consolidated debt cover of the Group:
· Net bank debt to EBITDA must not exceed 3.5:1.
· EBITDA to Net Interest Payable must not be less than 3.0:1.
All financial covenants of the facility have been complied with throughout the
period.
Loan from other investment
In the prior year, the Group's wholly owned subsidiary, Autorama Holding
(Malta) Limited, elected to transfer the insurance portfolio held in a
protected insurance cell with Advent Insurance PCC Limited to Atlas Insurance
PCC Limited. As part of this process, Advent Insurance PCC Limited issued a
loan to Autorama Holding (Malta) Limited to fund the investment in the new
protected insurance cell until the portfolio transfer was complete. This
process was completed during the prior year and the loan was repaid. As at 31
March 2024, £nil was recognised on the Consolidated balance sheet (September
2023: £1.1m).
15. Cash generated from operations
6 months to September 6 months to September Year to March
2024 2023 2024
£m £m £m
Profit after taxation 139.6 116.8 256.9
Adjustments for:
Taxation 47.9 46.0 88.3
Depreciation 2.6 2.2 4.8
Amortisation 7.7 5.5 13.5
Share-based payments charge (excluding associated NI) 5.5 3.6 7.5
Deferred contingent consideration - 10.4 10.4
Share of profit in joint ventures (1.8) (1.3) (2.8)
Loss/(profit) on sale of property, plant and equipment - 0.2 0.3
Net finance costs 0.9 1.8 3.5
Research and Development Expenditure Credit - - (0.1)
Changes in working capital:
Trade and other receivables (0.4) (6.8) (10.4)
Trade and other payables 0.3 6.4 6.0
Inventory (0.7) (0.6) 1.0
Provisions - - 0.1
Cash generated from operations 201.6 184.2 379.0
16. Share capital
As at 30 September 2024 As at 30 September 2023 As at 31 March 2024
Number Amount Number Amount Number Amount
'000 £m '000 £m '000 £m
Allotted, called-up and fully paid ordinary shares of 1p each
At beginning of period 907,214 9.2 923,075 9.3 923,075 9.3
Purchase and cancellation of own shares (8,487) (0.2) (10,404) (0.1) (23,711) (0.2)
Issue of ordinary shares - - 7,850 0.1 7,850 0.1
Total 898,727 9.0 920,521 9.3 907,214 9.2
During the period, 8.5m shares were purchased for cancellation (September
2023: 10.4m; March 2024: 23.7m) and nil shares were purchased for treasury
(September 2023: nil; March 2024: 1.5m). The average price per share was
764.5p (H1 2024: 632.6p) for a total consideration of £64.9m (H1 2024:
£65.8m) before transaction costs of £0.3m (H1 2024: £0.3m).
During the prior period, 7.8m shares were issued to settle the deferred
consideration relating to the Autorama acquisition.
Included within shares in issue at 30 September 2024 are 299,708 (September
2023: 336,195; March 2024: 312,831) shares held by the ESOT and 3,870,305
(September 2023: 3,970,907; March 2024: 4,899,346) shares held in treasury, as
detailed in note 17.
17. Own shares held
Own shares held - £m ESOT shares reserve Treasury Total
shares
£m
£m
£m
Own shares held as at 1 April 2023 (0.4) (25.6) (26.0)
Repurchase of own shares for treasury - (11.1) (11.1)
Share-based incentives exercised - 5.8 5.8
Own shares held as at 1 April 2024 (0.4) (30.9) (31.3)
Share-based incentives exercised - 6.5 6.5
Own shares held as at 30 September 2024 (0.4) (24.4) (24.8)
Own shares held - number ESOT shares reserve Treasury Total
Number of shares shares Number of shares
Number of shares
Own shares held as at 1 April 2023 340,196 4,371,505 4,711,701
Transfer of shares from ESOT (27,365) - (27,365)
Repurchase of own shares for treasury - 1,496,445 1,496,445
Share-based incentives exercised - (968,604) (968,604)
Own shares held as at 31 March 2024 312,831 4,899,346 5,212,177
Transfer of shares from ESOT (13,123) - (13,123)
Share-based incentives exercised - (1,029,041) (1,029,041)
Own shares held as at 30 September 2024 299,708 3,870,305 4,170,013
18. Share-based payments
The Group currently operates five share plans: the Share Incentive Plan,
Performance Share Plan, Deferred Annual Bonus, Single Incentive Plan Award and
the Sharesave scheme.
All share-based incentives are subject to a service condition. Such conditions
are not taken into account in the fair value of the service received. The fair
value of services received in return for share-based incentives is measured by
reference to the fair value of share-based incentives granted. Black-Scholes
and Monte Carlo models have been used where appropriate to calculate the fair
value of share-based incentives with market conditions.
The total charge in the period relating to the five schemes was £7.0m
(September 2023: £3.5m; March 2024: £8.2m). This included associated
national insurance ('NI') at the rate at which management expects to be
effective when the awards are exercised (13.80%), and apprenticeship levy at
0.5%, based on the share price at the reporting date.
The share-based payment charge reported in the prior six-month period includes
£10.4m relating to deferred share-based payment consideration relating to the
acquisition of Autorama, making a total combined charge of £14.0m (excluding
associated NI).
September September March
2024 2023 2024
£m £m £m
Sharesave scheme ('SAYE') 0.3 0.4 0.7
Performance Share Plan ('PSP') 1.2 1.1 2.1
Deferred Annual Bonus Plan and Single Incentive Plan Award 4.0 2.1 4.7
NI and apprenticeship levy on applicable schemes 1.5 (0.1) 0.7
Total charge from ongoing share schemes 7.0 3.5 8.2
Share-based payments relating to Autorama acquisition - 10.4 10.4
Total charge 7.0 13.9 18.6
Total charge excluding NI 5.5 14.0 17.9
Share Incentive Plan
In 2015, the Group established a Share Incentive Plan ('SIP'). Eligible
employees were awarded free shares (or nil-cost options in the case of
employees in Ireland) valued at £3,600 each based on the share price at the
time of the Company's admission to the Stock Exchange in March 2015. Shares
issued to satisfy the SIP were purchased by the Employee Share Option Trust
('ESOT').
September September March
2024 2023 2024
UK SIP Number Number Number
Outstanding at beginning of period 68,950 96,315 96,315
Options exercised in the period (13,123) (4,001) (27,365)
Outstanding at period ending 55,827 92,314 68,950
Performance Share Plan
The Group operates a Performance Share Plan ('PSP') for Executive Directors
and the extent to which awards vest will depend upon the Group's performance
over the three-year period following the award date. Both market based and
non-market based performance conditions may be attached to the options, for
which an appropriate adjustment is made when calculating the fair value of an
option. If the options remain unexercised after a period of 10 years from the
date of grant, the options expire. Furthermore, options are forfeited if the
employee leaves the Group before the options vest, unless under exceptional
circumstances.
On 20 September 2024, the Group awarded 457,203 nil cost options under the PSP
scheme. For the 2024 awards, the Group's performance is measured by reference
to growth in Earnings per Share (70% of the award), Revenue (20% of the award)
and Carbon Reduction (10% of the award) over the period to March 2027.
September September March
2024 2023 2024
Number Number Number
Outstanding at beginning of period 1,116,040 1,399,984 1,399,984
Options granted in the period 457,203 355,183 355,183
Dividend shares awarded 14,018 - -
Options exercised in the period (373,318) (9,130) (47,547)
Options forfeited in the period (11,421) (591,580) (591,580)
Outstanding at period ending 1,202,522 1,154,457 1,116,040
Deferred Annual Bonus Plan
The Group operates a Deferred Annual Bonus Plan ('DABP') for Executive
Directors. Awards under the plan are contingent on the satisfaction of pre-set
internal targets relating to financial and operational objectives. The extent
to which the awards vest will depend upon the satisfaction of the Group's
financial and operational performance in the financial year of the award date
(the 'Performance Conditions'). The awards will vest on the second anniversary
of the date the Remuneration Committee determines that the Performance
Conditions have been satisfied (the 'Vesting Period'). Awards are potentially
forfeitable during that period should the employee leave employment. The DABP
awards have been valued using the Black-Scholes method where appropriate and
the resulting share-based payments charge is being spread evenly over the
combined Performance Period and Vesting Period of the shares, being three
years.
On 26 June 2024, the Group awarded 115,501 nil cost options under the DABP.
September September March
2024 2023 2024
Number Number Number
Outstanding at beginning of period 212,034 108,704 108,704
Options granted in the period 115,501 103,330 103,330
Dividend shares awarded 2,992 - -
Options exercised in the period (111,696) - -
Outstanding at period ending 218,831 212,034 212,034
Single Incentive Plan Award
The Group operates a Single Incentive Plan Award ('SIPA') for the Operational
Leadership Team and certain key employees. The extent to which awards vest
will depend upon the satisfaction of the Group's financial and operational
performance in the financial year of the award date (the 'Performance
Conditions'). The awards will vest in tranches, with the first tranche vesting
on the date on which the Remuneration Committee determines that the
Performance Conditions have been satisfied, and subsequent tranches vesting on
the first and second anniversary of this date, subject to continuing
employment.
On 26 June 2024, the Group awarded 572,377 nil cost options under the SIPA
scheme for the Operational Leadership Team and certain key employees. For the
2024 awards, 75% of the award value is dependent on FY25 Operating Profit and
the remaining 25% is subject to successful implementation of digital retailing
related products by 31 March 2025. The fair value of the 2024 award was
determined to be £7.44 per option, being the mid-market price for the three
months leading up to the grant date.
During the prior year, the Group announced a new All-Employee Single Incentive
Plan Award ('All-Employee SIPA') that rewards employees with an extra 10% of
their salary in shares. The awards will vest in tranches, with the first
tranche vesting on the first anniversary of the grant date and subsequent
tranches vesting on the first and second anniversary of this date, subject to
continuing employment.
September September March
2024 2023 2024
Number Number Number
Outstanding at beginning of period 2,513,318 1,517,766 1,517,766
Options granted in the period 572,377 618,497 1,667,992
Dividend shares awarded 12,273 10,180 10,239
Options exercised in the period (491,880) (337,214) (515,383)
Options forfeited in the period (105,308) (142,859) (167,296)
Outstanding at period ending 2,500,780 1,666,370 2,513,318
Sharesave scheme
The Group operates a Sharesave ('SAYE') scheme for all employees under which
employees are granted an option to purchase ordinary shares in the Company at
up to 20% less than the market price at invitation, in three years' time,
dependent on their entering into a contract to make monthly contributions into
a savings account over the relevant period. Options are granted and are linked
to a savings contract with a term of three years. These funds are used to fund
the option exercise. No performance criteria are applied to the exercise of
Sharesave options.
Expected volatility is estimated by considering historic average share price
volatility at the grant date. The requirement that an employee has to save in
order to purchase shares under the Sharesave plan is a non-vesting condition.
This feature has been incorporated into the fair value at grant date by
applying a discount to the valuation obtained from the Black-Scholes pricing
model.
September September March
2024 2023 2024
Number Number Number
Outstanding at beginning of period 856,958 1,366,352 1,366,352
Options granted in the period 489,713 - -
Options exercised in the period - (54,254) (407,221)
Options lapsed in the period (50,600) (57,304) (102,173)
Options cancelled in the period (30,190) - -
Outstanding at period ending 1,265,881 1,254,794 856,958
19. Related party transactions
The Company is the ultimate parent entity of the Group. Intercompany
transactions with wholly owned subsidiaries have been excluded from this note,
as per the exemption offered in IAS 24.
Dealer Auction Limited
The Group transacted the following related party transactions with its joint
venture, Dealer Auction Limited (previously Dealer Auction (Holdings) Limited)
and its subsidiaries (together 'Dealer Auction'), during the period. The Group
provided data services to Dealer Auction under a licence agreement established
as part of the formation of the joint venture in January 2019. The value of
services provided to Dealer Auction was £0.3m (September 2023: £0.3m) and
has been recognised within revenue. On 30 September 2024, deferred income
outstanding in relation to the license agreement was £8.0m (September 2023:
£8.6m).
Key management personnel
Key management personnel share plan awards have been outlined in note 18.
20. Forward looking statements
This report includes statements that are forward looking in nature. Forward
looking statements involve known and unknown risks, assumptions, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Group to be materially different from any future results,
performance or achievements expressed or implied by such forward looking
statements. Except as required by the Listing Rules and applicable law, the
Company undertakes no obligation to update, revise or change any
forward-looking statements to reflect events or developments occurring after
the date of this report.
INDEPENDENT REVIEW REPORT TO AUTO TRADER GROUP PLC
Conclusion
We have been engaged by Auto Trader Group plc ("the Company") to review the
condensed set of financial statements in the half-yearly financial report for
the six months ended 30 September 2024 which comprises the consolidated
interim income statement, consolidated interim statement of comprehensive
income, consolidated interim balance sheet, consolidated interim statement of
changes in equity and consolidated interim statement of cash flows and the
related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2024 is not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the UK and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the
UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
David Derbyshire
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
7 November 2024
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