Auto Trader Group PLC (LON:AUTO) said trading strengthened in November and December, although it added that providing free advertising packages for customers wanting to sell their cars on its platform will hit profits, especially as it has repeated this offer to account for the new national coronavirus lockdown in England.
The FTSE 100-listed group said the free advertising offer, which was in place for the last month of 2020, will be made again in February, though it will result in a £5mln-£7mln operating loss for every month it runs.
Providing the first update since first-half results on November 5, the group said there had been a “continued improvement in customer numbers and stock on site through the third quarter to December”, with visits to its marketplace 20% above the same time a year earlier.
“Despite this demand, we do expect sales volumes to be impacted in January and February,” it cautioned, however.
Auto Trader said its balance sheet remains “strong”, having only drawn £45mln from its £400m revolving credit facility, and remaining well below its bank covenant requirements for both debt and interest cover.