Driving Change
Together.
Responsibly.
Auto Trader Group plc
Annual Report and Financial Statements 2024
Auto Trader’s purpose is Driving Change Together. Responsibly. Auto Trader is committed to creating
a diverse and inclusive culture, to build stronger partnerships with customers and use its influence to
drive more environmentally friendly vehicle choices.
With the largest number of car buyers and the largest choice of trusted stock, Auto Trader’s marketplace
sits at the heart of the UK car buying process. That marketplace is built on an industry-leading
technology and data platform, which is increasingly used across the automotive industry. Auto Trader
is continuing to bring more of the car buying journey online, creating an improved buying experience,
whilst enabling all its retailer partners to sell vehicles online.
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The following symbols indicate that
further supporting information can
be found elsewhere in this report or
on our PLC website:
plc.autotrader.co.uk
01
Strategic report
01
At a glance
02
Chair’s statement
03
CEO’s statement
06
Market overview
09
How we create value
10
Strategic progress
14
Section 172(1) statement
18
Key performance indicators
21
Non-financial and sustainability information statement
22
Financial review
25
Working responsibly
50
How we manage risk
53
Principal risks and uncertainties
61
Governance
61
Governance overview
63
Board of Directors
66
Corporate governance statement
70
Report of the Nomination Committee
73
Report of the Audit Committee
78
Report of the Corporate Responsibility Committee
81
Directors’ remuneration report
100
Directors’ report
104
Financial statements
104
Independent auditor’s report to the members
of Auto Trader Group plc
116
Consolidated income statement
117
Consolidated statement of comprehensive income
118
Consolidated balance sheet
119
Consolidated statement of changes in equity
120
Consolidated statement of cash flows
121
Notes to the consolidated financial statements
155
Company balance sheet
156
Company statement of changes in equity
157
Notes to the Company financial statements
161
Unaudited five-year record
162
Shareholder information
Our company purpose explains why we exist, our strategy is what we do,
and we have clear ways of working, with a strong values-led culture.
The pillars below are strongly interconnected and together they influence whether we’re successful
in the execution of our strategy. Over the past 12 months our marketplace has continued to strengthen,
with growing numbers of both buyers and sellers. We are supporting more of the industry using our platform
and data to power their businesses, at the same time as bringing more of the new and used car buying
experience online, on Auto Trader. We’ve introduced an all-employee share scheme, underpinning the sense
of ownership that already exists amongst our employees, and have evolved our company values.
OUR PURPOSE-DRIVEN STRATEGY P10
WORKING RESPONSIBLY P25
WHY WE EXIST
Driving Change Together.
Responsibly.
Our purpose of “Driving Change
Together. Responsibly”
encompasses our strategic
approach, ways of working
and culture. As an organisation
we aim to be purpose driven,
principled, and values led.
HOW WE WORK
Working responsibly,
working together
Whilst it lacks precision, our
culture is often described
internally as ‘doing the right
thing’, which comes through as
‘Responsibly’ in our purpose:
• Working as one Auto Trader
• Working in partnership
• Thinking as owners
WHO WE ARE
Our values define
who we are
Our values are the guiding
characteristics that underpin
our culture. They are embedded
into our ways of working and
core to our success:
• Community
• Curious
• Humble
• Determined
• Decisive
• Adaptable
At a glance
OUR VALUES P41
WHAT WE DO
Delivering on our
strategic focus areas
Alongside working
responsibly, we have three
strategic focus areas:
• Marketplace: be the best
place to buy a car
• Platform: be the industry’s
data and technology
platform
• Digital retailing: be the
enabler for all retailers
to sell online
Strategic report
Governance
Financial statements
01
Auto Trader Group plc
Annual Report and Financial Statements 2024
Chair’s statement
“It’s a privilege to
succeed Ed Williams as
Chair of Auto Trader.”
INTRODUCTION
It’s a privilege to succeed Ed Williams as Chair
of Auto Trader and I would like to thank him
for the support he has provided to me in taking
on this role and acknowledge the immense
contribution he has made over his tenure.
As Nathan summarises on the subsequent
pages, we believe that the drivers of our
future performance are likely to be reasonably
consistent and I am clear as to the value
creation opportunity that lies ahead from
pursuing the strategy that is outlined below.
RESULTS OVERVIEW
This year marks another strong financial and
operational performance for Auto Trader.
Whilst parts of the automotive market have
seen some softening, the market has generally
been robust and more customers than ever
have opted to partner with us. We continue
to improve our product offering, enabling
customers to compete on our marketplace
through greater access to our data-driven
insight and enabling more of the buying journey
to be completed online, all yielding greater
efficiencies for customers. We continue to
grow and invest in our people, creating an
environment where there is increasing
alignment between employees, customers
and shareholders. Excluding the pandemic
recovery year, the business achieved record
revenue growth in the core Auto Trader
business, increasing 12% to £529.7m.
At a Group level, Autorama revenue was £41.2m
(2023: £27.2m) and therefore Group revenue
was £570.9m (2023: £500.2m). Operating profit
in the core Auto Trader business was £378.6m
(2023: £332.9m), up 14% on last year, with an
operating profit margin of 71% (2023: 70%).
Autorama recorded a reduced operating loss
of £8.8m (2023: £11.2m). Group operating profit
increased by 26% to £348.7m (2023: £277.6m),
reflecting the increase in revenue and the
£23.0m reduction in Group central costs to
£21.1m (2023: £44.1m). Group operating profit
margin was 61% (2023: 55%). Basic earnings per
share increased 13% to 28.15p (2023: 25.01p).
BOARD CHANGES
An important enabler for our success over
the years has been a capable, diligent and
supportive Board. Following my appointment
as Chair with effect from the 2023 Annual
General Meeting (‘AGM’), much of my focus has
been on succession planning. Geeta Gopalan
joined the Board on 1 May 2024 and Amanda
James will join the Board on 1 July 2024, both
as Non-Executive Directors and as members
of the Audit, Remuneration, Corporate
Responsibility and Nomination Committees.
With effect from the conclusion of the 2024
AGM on 19 September 2024, Geeta will be
appointed as Senior Independent Director and
Remuneration Committee Chair, and Amanda
will be appointed as Audit Committee Chair,
both subject to shareholder approval. These
appointments replace David Keens and Jill
Easterbrook who came to the end of their third
three-year terms in 2024, and therefore will not
stand for re-election at the 2024 AGM. We are
deeply grateful for the contribution Ed, David
and Jill have made in their time at Auto Trader.
Following this AGM, the number of Independent
Non-Executive Directors will reduce to five and
our Board will comply with the recommendation
in the FTSE Women Leaders Review and Listing
Rules with respect to appointing a woman in one
of the roles of Chair, Senior Independent Director,
Chief Executive or Chief Financial Officer.
CAPITAL STRUCTURE AND DIVIDENDS
The Directors are recommending a final dividend
of 6.4 pence per share. Subject to shareholders’
approval at the AGM on 19 September 2024, the
final dividend will be paid on 27 September 2024
to shareholders on the register of members at
the close of business on 30 August 2024. The total
dividend for the year is therefore 9.6 pence per
share (2023: 8.4 pence per share).
The Group’s long-term capital allocation policy
remains unchanged: continuing to invest in the
business enabling it to grow while returning
around one third of net income to shareholders in
the form of dividends. Following these activities
any surplus cash will be used to continue our
share buyback programme and steadily reduce
gross indebtedness.
ANNUAL GENERAL MEETING
The AGM will be held in our Manchester office
on 19 September 2024 at 11am.
Matt Davies
Chair
30 May 2024
Matt Davies
Chair
Strategic report
Governance
Financial statements
02
Auto Trader Group plc
Annual Report and Financial Statements 2024
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CEO’s statement
“This has been another
year of strong financial,
operational and strategic
progress for Auto Trader.”
STRATEGIC AND OPERATING REVIEW
With almost 10 years since IPO in March 2015 and
two years since our last investor day we thought
it worthwhile to look back at our performance
over this longer period. We believe many of the
contributing factors are still equally relevant to
our future. Historically our results statements
have focused solely on what has happened in the
previous financial year, which whilst important,
does not always highlight the key factors
shareholders might consider when thinking
about our longer-term prospects. We will look
to supplement the usual full year detail
with this forward-looking view each year.
Since Auto Trader’s IPO the business has
delivered consistent execution and
performance. During the first few years of being
a public company, revenue grew steadily whilst
much of the focus was on transitioning to a pure
digital business and changing the cost base from
a model that had remnants of our magazine
heritage. This transition yielded cost efficiencies
and stronger profit growth, which was largely
a one-time opportunity. Since then, our
performance has been characterised by higher
revenue growth, with a focus on our core
marketplace and product growth, coupled with
investments in our platform and adjacent
opportunities. These revenues have driven profit
growth that is only slightly lower than the period
during which margins expanded significantly.
Our profits have been consistently distributed
through a combination of dividends and share
buybacks, which is something we expect
to continue. During our history as a listed
business, £1.1bn of surplus cash has been
returned to shareholders (net of the equity raise
during COVID-19) and we have delivered total
shareholder returns of 225% versus 60% for the
FTSE 350 (excluding investment trusts). We don’t
always expect our performance to be linear, with
2021 being a good example, but we do expect the
drivers of our historic and future value creation
to remain reasonably consistent. These drivers
include: a growing automotive market; our
market leading position; our heritage of
innovation; a focused and consistent strategy;
and our purpose and culture.
Nathan Coe
CEO
1. A GROWING AUTOMOTIVE MARKET
Today, most of our economics are linked to the
number of used vehicle retailers who choose
to advertise on Auto Trader. Used vehicle supply
is determined by new vehicle sales (less
scrappage) in preceding years, meaning it
does not meaningfully change with economic
conditions and therefore our business does
not see significant cyclicality. When economic
conditions or consumer demand do change
it is used vehicle prices that adjust, not supply.
Over the past 20 years, the total size of the UK
car parc has gradually increased, growing on
average by just over 250,000 cars per year. The
COVID-19 pandemic broke this consistent trend, as
new car production fell to levels below even those
of the Financial Crisis in 2007-09. From time to time
there will be these anomalies, but over the long
term we expect the used car market to grow as
a result of population growth and stable trends
in car usage.
At times there have been concerns about a
material consolidation within our customer base,
although to date this has not materialised. We
do expect the biggest retailers to get bigger and
we have seen consolidation in our very largest
customers, but not at a level that materially
changes the overall market fragmentation. At the
time of our IPO, we had 13,452 retailers and today
we have 13,783, despite losing c.550 retailers when
we sold our business in the Republic of Ireland.
Finally, we expect the value of both new and
used cars to increase over the long term. During
a short window of time, used car prices will
adjust due to supply and demand movements,
but over longer time periods we expect used
car values to increase gradually due to GDP
growth, population growth, inflation, improved
functionality, longer useful lives and the move
towards more expensive electric vehicles. In
the period from 2011 to 2024, used car prices
have increased by an average of 4% per year.
These factors combine to provide an underlying
market that is resilient and likely to grow in both
volume and value over the long term.
Group revenue and operating profit
Cash returned to shareholders
Strategic report
Governance
Financial statements
03
Auto Trader Group plc
Annual Report and Financial Statements 2024