Shares in Auto Trader Group PLC (LON:AUTO) started strong in early trading Thursday after it increased its revenue guidance for the full year as record growth from its retailer products boosted first-half earnings.
The FTSE 250 digital car marketplace reported a pre-tax profit of £114.5mln for the period, up 9% on last year while revenues climbed 7% to £176.8mln.
Average Revenue Per Retailer forecourt (ARPR) per month rose to £1,826 from £1,674 previously.
The firm also hiked its interim dividend to 2.1p per share from 1.9p in the first half of last year.
During the first half, Auto Trader said it had seen record growth from its retailer products, successfully monetising a dealer finance product in April and seeing increased penetration of its advanced and premium trade advertising packages.
The group also said cross-platform visits in the first half were nearly four times larger than its nearest competitor, with full-page advert views rising 1% to 247mln per month.
In terms of stock, physical cars on site were down 3% to 437,000 while retailer forecourts were relatively stable at an average of 13,153 compared to 13,213 a year ago.
In its outlook, the firm said the strong first half meant revenue growth for the full year was “likely to exceed previous guidance”, with ARPR growth to date having outperformed expectations despite a stock headwind.
Regarding Brexit, the group said it “did not foresee any issues” affecting its ability to provide services or change its cost base and was confident of delivering growth expectations for the rest of the year.
Steve Clayton, manager of Select funds at Hargreaves Lansdown, said that the “knock out” results showed Auto Trader was “far from being held back by the weak market for new cars” and had managed to capitalise on its consumer reach by building advertising revenues with manufacturers while also “generating strong real increases in income from its core used car dealer base”.
Shares were up 3.7% at 455.6p.