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Impressive Auto Trader rockets

Published Thu, 07 Jun 2018 13:29:17 on Interactive Investor

In the three years since Auto Trader (AUTO) joined the stockmarket in a £2.35 billion IPO, investors have grown used to a stop-start journey in which share price peaks have been followed by sharp descents.
Today, the shares were in the fast lane after the online vehicle marketplace impressed analysts with its annual results and soothed worries that market forecasts for the year ahead may have become too optimistic.
The key metric of average revenue per retailer (ARPR) forecourt was a particular focus after rising by £149 to £1,695 in the year to March 31. This figure was driven by broad growth across stock, price and product.
But with fewer cars for sale in the market, Auto Trader is forecasting a small decline in stock in 2019 that will cause ARPR growth to be below the rate seen this year. Barclays pointed out that the pre-results consensus was for ARPR to grow 6.9% in FY19, compared with the 9.6% seen this year.

Source: interactive investor Past performance is not a guide to future performance
They said: "There was a lot of nervousness from the buyside that consensus was too high. Their commentary suggests that product upsell is going well and the price rise (in April) has been in line with expectations."
In today's results, basic earnings per share rose 15% to 17.76p while cash generated from operations lifted £13.2 million to £226.1 million. CEO Trevor Mather said the improvement had been driven by... Read more