Auto Trader profit slumps in H1 as advertising promotions hurt revenue

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StockMarketWire.com – Digital automotive marketplace Auto Trader reported a slump in profit as revenue was hurt by its decision to offer promotions on advertising for customers on its platform.

For the six months ended 30 September 2020, pre-tax profit fell 48% to £66.2 million year-on-year as revenue slipped 37% to £118.2m.

Trade revenue fell 38% to £100.2 million, driven by the company’s decision to allow retailer customers to advertise on its marketplace for free during the lockdown months of April and May, and for a 25% discounted rate for the month of June.

Looking ahead, the company said it had started the second half of the year ‘well’ and forecast total costs for the full year were likely to decline at a rate of low-mid single digits amid cost cutting measures undertaken.

‘During December, we will again reduce marketing spend and we have no intention of using the government’s furlough programme,’

‘The board believes the actions taken by the company have strengthened its foundations and positioned it well to enable car buying to shift online which has been accelerated by the COVID-19 pandemic,’ it added.

Story provided by StockMarketWire.com

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