LONDON (ShareCast) - (Sharecast News) - Auto Trader Group hiked its dividend on Thursday as it reported an acceleration in its annual profit and revenue growth, with the board adding that it remains confident of meeting current year expectations despite "continued market uncertainty".
The new and used car sales website operator reported a profit before tax of £242.2m for the 12 months ended 31 March, for an increase of 15% compared to the year before, while revenue jumped by 8% to £355.1m despite weak demand, aided by an £8.7m boost to profit from the disposal of its Smart Buying platform.

Consequently, the board proposed a final dividend of 4.6p per share, up 15% from the year before, to bring the year's total dividend up to 6.7p per share from 5.9p per share last year.

Trade revenue, which stems from retailers and home traders, was also a major factor behind the growth in the company's profits, increasing by 8% to £304.6m.

Meanwhile, manufacturer & agency revenue increased by 18% to £22.5m after a strong first half of the year, although consumer services revenue slid by 6% to £28.0m due to a lack of supply of older vehicles and increased competition.

Average revenue per retailer forecourt per month increased by 9% to £1,844 as growth from product and price offsetting an expected reduction in stock.

Trevor Mather, chief executive of Auto Trader, said: "We have achieved another strong year of revenue and profit growth driven by a line-up of products that are proven to improve the business performance of our retailer and manufacturer customers."

Mather added that the new financial year had started well for the FTSE 100 traded company, leaving the board confident of meeting growth expectations despite the continued wider market uncertainty.

Analysts from Shore Capital said they were impressed by the strength of Auto Trader's headline performance against a challenging backdrop, stating that they now expect the company's brand strength, unrivalled reach and the quality of its dealer and consumer offerings to drive a "very attractive" EPS and DPS progression.

"That said, in the shorter-term we remain mindful of the potential for: economic headwinds; muted (if somewhat steadier) used car transaction levels (SMMT data indicates -0.6% YTD during Q1 2019); continuing disruption from new emission legislation, and; weaker new car demand (SMMT data indicates 4.1% and 2.7% YoY declines during April and YTD, respectively), to impact dealer margins / marketing spend and drive marginal players out of the market."

Auto Trader Group's shares were down 0.03% at 587.20p at 0810 BST.

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