Investing.com — Shares of British online car marketplace Auto Trader hit a new record high Thursday as solid demand for used cars fueled better-than-expected annual results.
At 06:02 ET (10:02 GMT), the stock was up 12.46% at 821.60 pence, putting it on course for its biggest single-day rise in more than two years.
Auto Trader has been boosted by a rise in interest rates, which has seen car buyers looking for used cars instead of spending more on new ones.
In a statement, the company said demand has remained “resilient”, with cars continuing to sell faster than before the COVID-19 pandemic and supply “gradually” improving. They added that the decline in trade prices earlier this year “has since stabilized in line with seasonal trends.”
But Auto Trader noted that the new car retail market has been ‘more challenging’, mainly characterized by higher discount activity.
Average sales per retailer, a key performance measure for Auto Trader, grew 12% in the 12 months ended March 31 thanks to “continued adoption of additional products and services,” the company said.
Full-year operating profit rose 26% to £348.7m and revenue rose 14% to £570.9m, beating Visible Alpha consensus forecasts by 3%, RBC Capital Markets analysts said.
“We are confident in Auto Trader’s long-term growth opportunities through the digitalization of the used car purchasing journey. However, we believe that short-term macro challenges could cause a slower pace of product and high-yield package adoption “, said the RBC analysts. a note for customers.
