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(Alliance News) - Auto Trader Group PLC on Thursday declared no dividend for the first half of its financial year, saying this was in response to the UK government's announcement on Saturday that England would go into a second lockdown for a month.
Concerning its performance in the interim period, the Manchester-based online automotive marketplace suffered a double digit fall in profit, as revenue fell on the decision to allow its car retailer customers to advertise for free during the lockdown months of April and May.
For the six months to the end of September, Auto Trader reported a 48% fall in pretax profit to GBP66.2 million from GBP127.7 million a year before, on revenue that declined by 37% to GBP118.2 million from GBP186.7 million.
However, revenue improved during the half-year, rising to GBP91.8 million in the second quarter from GBP26.4 million in the first.
Operating profit fell by 48% to GBP68.5 million in the first half, from GBP131.5 million, as the margin fell to 58% from 70%.
During the months of April and May, Auto Trader allowed its retailer customers to advertise for free on its marketplace, and then in June allowed advertising at a 25% discounted rate.
The group said average revenue per retailer per month dropped by 38% year-on-year to GBP1,206 from GBP1,951. Platform visits per month increased 12% to 57.3 million from 51.2 million the prior year.
Looking ahead concerning the lockdown, Auto Trader believes that car retailers will be allowed to operate both home delivery and click & collect services, leading to expectations that consumer activity seen through October and November so far will sustain some sales.
In addition, the company said it will make advertising free in December, and extend payment terms by a month for November services.
"The past eight months have represented perhaps the greatest challenge ever faced by our company and our industry. However, as a result of the early and decisive actions that we took to protect our people and support our customers, we believe that our business, culture, and customer relationships are in a strong position," said Chief Executive Officer Nathan Coe.
"Our first quarter performance was heavily impacted by our decision to support our retailer customers by allowing them to advertise for free during the months of April and May, and for a 25% discounted rate in June. Since that time the used car market has bounced back strongly. We have seen a steady increase in the number of retailers advertising on our platform and our revenues in the second quarter were only marginally down on prior year, with profits flat," Coe added.
Shares in Auto Trader were down 1.9% at 583.20 pence on Thursday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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