Auto Trader Group plc

Auto Trader revenue increased 4% to GBP 585.3 million. Total Auto Trader costs increased 4% to GBP 181.4 million, and operating profit increased 4% to GBP 408 million, with operating profit margin remaining at 70%. Group operating profit increased 4% to GBP 392.7 million, with group operating margin at 63%. Cash generated from operations rose 5% to GBP 418 million, and EPS increased 8%. Average retailer forecourts decreased 0.5% to 13,942, while average revenue per retailer rose 5% to GBP 2,995 per month. For FY27, management expects group operating profit of GBP 395 million to GBP 415 million, margins at least maintained excluding vehicle and accessory sales, and at least high single-digit EPS growth. They also expect Auto Trader revenue to recover in the second half, with the pricing event contributing GBP 85 to GBP 95 to ARPA growth, products contributing GBP 65 to GBP 75, and stock improving to minus GBP 30 to minus GBP 40 for the full year.

Nathan Coe framed the year as tougher than expected because retailer profitability was hit by new car economics, the ZEV mandate, cost inflation, and intense cost-cutting at dealers. He said the business is past the low point, with retailer numbers, stock and upsells improving since year-end, and emphasized confidence in Auto Trader’s core audience, data, and AI capabilities. His tone was constructive and defensive at the same time: acknowledging friction from Deal Builder rollout and cancellations, but arguing the company’s products remain relevant and that AI should extend—not weaken—the platform’s value.

Jamie Warner highlighted that revenue growth was broadly driven by retailer revenue, which rose 4%, and by Manufacturer and Agency revenue, which increased 14%, while Consumer Services revenue fell 8%. ARPR rose 5% to GBP 2,995, with GBP 117 of growth from the annual pricing event and GBP 72 from products, while stock became a drag after November as more difficult trading conditions reduced paid volumes. On costs, people costs were GBP 93.6 million, marketing was GBP 21.9 million, and other costs were GBP 181.4 million, with higher cloud and property spend; depreciation and amortization rose 49% to GBP 9.4 million. He also said the company drew GBP 165 million from its revolver, ended with GBP 18.2 million cash and cash equivalents, bought back 58.5 million shares for GBP 369.1 million, paid GBP 94.1 million in dividends, and expects about GBP 500 million of buybacks in the next year, taking leverage toward 1 turn of EBITDA.

Analysts focused on what is driving the stock decline, whether FY27 guidance assumes an underlying retailer recovery, and how the pricing event can keep delivering value after this year’s 5.5% headline increase. Management said the second-half weakness was concentrated in November and December when retailers were under acute pressure, and that April and May have improved, though the recovery is still early. On churn, they said some retailers went out of business, others merged or reduced exposure, and some moved to a mix of competitors; on AI traffic, they said LLM-originated traffic is still less than 0.5% and not yet a major source of visits. They also said Deal Builder remains strategic, but the rollout will stay more measured and flexible after feedback from retailers.