Autotrader has seen its shares come under pressure after lower-than-expected annual profits overshadowed plans to boost shareholder returns by £600 million over the coming year. The car-selling platform reported a 4% rise in operating profits to £392.7 million for the year to March 31, with revenues also lifting by 4%. Pre-tax profits increased 3% to £388.8 million.
Market Reaction
However, shares in the FTSE 100 firm slumped 9% in Thursday afternoon trading as both earnings and revenues missed market forecasts. The group also revealed that dealership numbers fell amid concerns over the speed and nature of the roll-out of its AI-driven retailing tool, Deal Builder. The number of dealer forecourts on its books dropped nearly 1% to 13,942.
Dealership Concerns
Autotrader said: “Whilst this was disappointing, we have listened carefully to customer feedback, taken proportionate action and remain focused on winning back retailers and strengthening our long-term partnership with customers.”
Shareholder Returns
The group announced it would increase shareholder returns by about £600 million in 2026-27, which will include around £500 million in share buybacks as well as dividend payouts. Autotrader’s returns for investors would reach £1 billion over 2026 and 2027, it added.
CEO Commentary
Chief executive Nathan Coe said the higher profits and sales came “despite a challenging backdrop”. “Our competitive position has strengthened, with six times more time spent on Autotrader than all our main competitors combined,” he said. Autotrader is predicting further growth in earnings over the new financial year, with the group pencilling in operating profits of £395 million to £415 million.
AI Strategy
Mr Coe put faith in the firm’s plans to ramp up the use of artificial intelligence (AI). He said: “We remain committed to using our brand, technology and proprietary data to benefit car buyers and retailers. AI will significantly enhance our ability to do this, which has already been demonstrated through our retailer products such as Co-Driver and Buying Signals, as well as our improved search functionality for car buyers both on our marketplace and within ChatGPT.”
