Auto Trader Group PLC (LON: AUTO) have lifted their dividends to shareholders after reporting profit gains in their first half update.
Auto Trader were quick to reassure investors for future outlook by saying that the firm remains confident in meeting growth expectations for financial 2020 despite ongoing market uncertainty.
It has been a busy few weeks in the automotive industry, with many firms making moves in order to streamline costs and boost demand amid a slow market production period.
Last week it was reported that Peugeot (EPA: UG) and Fiat Chrysler (NYSE: FCAU) had finalized a merger move that would make them the fifth biggest car producer in the world.
Additionally, despite a tough trading climate and slow production levels, Nissan (TYO: 7201) held faith in the UK market by moving their Juke manufacturing operations to their Sunderland plant.
For the six months to September 30, Auto Trader recorded a 12% rise in pretax profit to £127.7 million from £114.5 million a year ago, on revenue of £186.7 million, up 6% on £176.8 million a year prior.
Operating profit grew 9% to GBP131.4 million, with margins rising to 70% from 68%.
“We have had a good first half and have seen an even greater number of car retailers opting to partner with Auto Trader to access our growing consumer audience,” said Chief Executive Trevor Mather.
“Despite ongoing market uncertainty, the board is confident of meeting its growth expectations for the year,” Mather added.
The online automotive marketplace said average revenue per retailer per month rose 7% year-on-year to £1,951 in the first half from £1,826, which showed good progress for the car retailer.
Platform visits per month increased by 4% to 51.2 million in the interim period from 49.3 million a year ago.
At a time where there appears to be a global slowdown in the automotive industry, these results will come as a relief to shareholders.
The fact that seniority at Auto Trader were quick to give a positive outlook for the next six months will for now suffice shareholder appetite, but further scrutiny will be expected in their next update.
It will be interesting to see how the new mergers formed will affect competition in the car retailers sector, but for now that Auto Trader can be pleased with the results published.
Auto Trader has increased its interim dividend to 2.4p per share from 2.1p.
Shares of Auto Trader were 3.17% to the good, and are trading at 566p per share. 7/11/19 10:52BST.
