Autotrader Group Plc

Good morning, everyone, and welcome to Autotrader's results for the full year ending the 31st of March 2025. I'm joined by our COO, Catherine, and our CFO, Jamie, who will both be presenting and joining me for Q&A later on. Overall, we're pleased with the progress that we've made through this financial year. This includes our financial results, although as expected, they were impacted by the acceleration in speed of sale during the year. Importantly, we've made good progress on the areas that are within our control and plan on doubling down on these in the year ahead. Firstly, our market position is strong with record levels of buyers and retailers using AutoTrader. Our platform strategy is operating at scale with more than a billion calls to our data services benefiting over 90% of retailer customers through over 120 technology partners. Secondly, our event in April this year has gone well, where we monetised the first features within our co-driver AI product suite. We see good potential for future development in this area as we make AI available to dramatically improve the car retailing and buying experience. These first products have seen immediate and strong engagement with both retailers and consumers. Thirdly, we have continued to make progress on digital retailing, where we have materially increased customers, stock and deals generated. Given the potential of this product to strengthen our core business, we've decided to change our approach, which should result in both accelerated adoption and monetisation, which Catherine will cover later on. The combination of these mean we have four rich streams of future product development, including advertising products, AT Connect and our data products, digital retailing and now co-driver. When combined with a car market that will grow over the long term and our strong market position, this product pipeline gives us the confidence that we can continue to grow and make meaningful improvements to the buying and retailing of cars in the UK. I'd like to thank all my colleagues at AutoTrader, our customers, shareholders, and wider stakeholders for their continuing trust and commitment to AutoTrader. Starting with some of the highlights during the year. Group revenue grew 5%, operating profit grew 8%, and basic EPS grew 12%. This demonstrates the operating leverage in our business and the consistent application of our capital policy. In the core auto trader business, revenue growth was 7% and operating profit, excluding the impact of digital services tax, which we incurred for the first time, was also up 7%. Retailer revenue grew in line with expectations at 7%. Forecourt numbers have also remained strong, which has altered the mix between retailer growth and average revenue per retailer or ARPA. Retailers grew 2% for the year, and ARPA increased by 5%, or £133, year on year. The majority of ARPA growth this year came from a strong pricing and product event in April 2024, where we launched our third Autotrader Connect module. Consumer engagement on the platform has reached record levels, and our lead over our nearest marketplace competitor remains at over 10 times. DealBuilder customer numbers have grown by just over 80% to 2,000 retailers, and consumers generated almost 50,000 deals, which was triple the year before. The interaction of market dynamics and our business model has influenced our results, as I mentioned earlier. While AutoTrader revenue growth was healthy at 7%, it would have been higher if it wasn't for the significant increase in the speed with which vehicles were sold during the year. The charts on this page hopefully go some way to explaining this. In the top left, you can see the increase in number of visits on AutoTrader, which has reached record levels. This is a proxy for vehicle demand, which has been strong for the past three years and strengthened again in this financial year. Over the same period, against that higher demand, used car prices actually fell, which you can see in the chart on the top right. This was driven by a relatively sudden drop in trade prices during late calendar year 2023 over nervousness about significant depleting activity that was happening at the time. That flowed through to retail prices for used cars, which you can see fell from mid FY24 through to mid FY25. This explains some of the challenging results you may have seen from retailers during that period, despite strong consumer demand. These pricing trends, when combined with strong demand, drove the acceleration of speed of sale, which can be seen in the bottom left chart. This then flowed through to livestock on auto trader, which you can see in the chart on the bottom right. Average days to sell was 32 days last year versus 30 days this year, which is 6% faster. That flows through to our stock-based commercial model. So despite having 5% more cars advertised during the year, retailer stock and therefore the stock lever was actually down 1% for the year. As you can see on the charts, in the second half of this financial year, demand continues to be strong and used car prices are slowly adjusting upwards. However, we have not yet seen speed of sales slow. We have, however, responded with tactical offers to maximise stock on the platform and we continue to monitor all these metrics very closely, both for our own performance and the performance of our customers. I'll briefly cover the financial results, which Jamie will cover in more detail next. Group revenue increased by 5%, with auto trader revenue increasing by 7%. Group operating profit increased by 8%. Auto trader operating profit increased by 4% after the impact of the UK digital services tax. In line with expectations, Autorama reduced its operating losses to 4.3 million pounds. and non-cash acquisition-related costs were £12.9 million, which was £8.2 million less than in the prior year. Group operating profit margin was 63%, and auto traders operating profit margin contracted slightly to 70%, again due to the digital services tax. Basic EPS was up 12%, and cash generated from operations was up 5%. We returned 275.7 million pounds of cash to shareholders through 157.3 million pounds in share buybacks and 88.4 million pounds in dividends. Today, we're declaring a final dividend of 7.1 pence per share, making total dividends 10.6 pence per share for the year, which is up 10% on the previous year. Now on to operational results. The average number of cross-platform visits were up 5% to 81.6 million per month, and we continue to account for over 75% of all time spent across our main competitor set. The average number of retailer forecourts advertising with us was up 2% to 14,013 retailers. Average revenue per retailer, as mentioned earlier, was up 5% to £2,854, mainly due to our product and pricing event that we implemented on 1 April 2024. Live car stock was up 1% to £449,000, with that stock growth driven by private listings. And finally, the average number of full-time equivalent employees increased to 1,267 during the period. Now for our cultural KPIs, which are a subset of metrics we measure to ensure we are creating an environment that allows us to attract, engage, develop and retain the very best talent. 91% of employees are proud to work at AutoTrader and our Glassdoor rating is 4.6 out of five stars. At the 31st of March, six of our nine board members were women and two were ethnically diverse. 44% of our people are women and 19% are ethnically diverse. 43% of our leaders were women and 10% ethnically diverse. We maintain our aim to achieve net zero carbon emissions across our value chain by 2040 and halve emissions by 2030. Our carbon emissions for the year across Scopes 1, 2 and 3 reduced 6% to 93.2 thousand tonnes, of which the vast majority are Scope 3. I'll now hand you over to Jamie to talk us through the financials in more detail.

Thanks, Nathan, and good morning, everyone. I'll start by focusing on the core auto trader financials. Starting with revenue, total auto trader revenue increased 7% to $564.8 million. Trade revenue also increased by 7%, with the largest component of this being retailer revenue, which also grew by 7%. The average number of retailer forecourts on our platform increased just over 14,000, a 2% year-on-year increase, an average revenue per retailer increased by 5% to £2,854 per month, with more detail given on the following slide. Also within trade revenue, we've seen an increase in home trader pay-as-you-go listings and growth in other trade revenue. Consumer services revenue increased by 7%. Within this, private revenue generated from individual sellers was consistent year on year. Motoring services increased by 22%, largely through finance revenue, where we act as an introducer on private adverts and trade adverts where the retailer does not offer their own finance. Revenue from manufacturing agency customers decreased 8% year on year. Much of this decline was driven by us foregoing a small amount of platform revenue for supporting certain manufacturers used vehicle locators in exchange for VIN level builds data, which is an important data set and feeds into our full suite of taxonomy, valuations and vehicle metrics. Now onto ARPA, live car stock and retailers. The chart on the left shows the components that contribute to the movement in ARPA compared to the prior year. As you can see, ARPA growth was driven by the price and product levers with a small decline in stock. ARPA growth in the year has been impacted by the 2% growth in retailer forecourts. This growth came from lower yielding independent and non-car customers. There was also the impact from the loss of one very high yielding online retailer. This change in retailer mix has had a dilutive impact of just over 1.5%, giving underlying ARPA growth for this year of just over 6.5%. The impact of that dilution is prorated across the three ARPA levers. Taking each of the levers in turn and what drove their growth, We delivered our annual pricing event for all customers on the 1st of April 2024, which included additional products and a like-for-like price increase, which contributed £78 to ARPA growth. Product contributed £77. Most of this growth was from products included in retailer advertising packages in April 2024, which included trend evaluations and enhanced retail check. The remaining product lever growth was driven by growth in new car, where we increased the number of paying customers over the period. Turning now to stock, you'll see on the right-hand side of the chart that the number of live cars advertised on AutoTrader increased slightly year on year. Used car stock increased by 1%, which was driven by an increase in the number of private listings, which do not impact ARPA. The volume of slots retailers paid for in the year was slightly down, which is reflected in the stock lever. Auto trader costs increased 13% to $174.4 million. However, half of this cost increase, or $10.2 million, relates to the digital services tax, which was recognised for the first time. Excluding the impact of the digital services tax, costs increased 7%. Within this, people costs increased by 14% due to an increase in the average number of full-time equivalent employees to 1,140, an increase in underlying salary costs and share-based payments, largely due to the introduction of our new all-employee share scheme in November 2023. Marketing spend increased to 24.6 million, while other costs, which include data services, property-related costs and other overheads, decreased by 8%. Depreciation and amortization increased by 7%. As a reminder, we fully expense our research and development costs, hence our low levels of capex and depreciation. In addition to our investment in cloud-based services, we have around 400 people in product and technology who are continuously improving our platforms and developing new products for consumers and retailers. Operating profit increased by 4% to 394 million and operating profit margins contracted slightly due to the impact of digital services tax. Excluding this tax, operating profit increased 7% and margins were stable. Our share of profit generated by dealer auction, the group's joint venture, increased 29% to 3.6 million. Having covered AutoTrader, the main part of the group, we'll briefly cover Autorama results. As a reminder, the Autorama acquisition was and remains part of the strategy to bring attractive new car offers to car buyers on AutoTrader and to make new cars a more important part of our proposition. Autorama revenue was 36.3 million, with vehicle and accessory sales contributing 26.1 million and commission and ancillary revenue of 10.2 million. Vehicle and accessory sales relates to vehicles that flow through our balance sheet, where we delivered just under 900 vehicles in the period, the cost of which were taken through cost of goods sold. People costs decreased by 32%, marketing was 2.7 million, and other costs were 2.8 million. There was 1.5 million of depreciation and amortization, which was largely for developed software capitalized in prior years. Excluding the cost of goods sold, costs of 14.4 million represent a 34% year-on-year reduction. Total deliveries amounted to 6,268 units. The leasing market for brokers has been impacted by the broader new car market dynamics, where supply into this channel has been limited, although this has improved slightly in recent months. The Autorama segment made an operating loss of 4.3 million. This was a significant reduction on last year through the accelerated integration into the main auto trader business and platform. With group revenue up 5%, reduced group central costs and a reduced Autorama loss, we saw total group operating profit increase 8% to 376.8 million and group operating profit margins increased to 63%. As we grow, the strong cash generation of our business leaves us well-placed to return surplus cash to shareholders. Cash generated from operations was at £399.7 million. The statutory income statement outlines areas beyond our revenue and operating costs. Net finance costs decreased to £1.1 million, largely due to reducing our gross debt to nil. Our profit before tax was £375.7 million, 9% higher than last year. The group tax charge of £93.1 million represents an effective tax rate of 25%. For clarity, digital services tax being a tax on revenue is reported as an operating expense in the auto trader segment and is not included in this calculation. The recently announced UK-US trade deal has not impacted DST. However, we will continue to monitor the progress of any changes to the application of this tax. Although for the avoidance of doubt, we'd recommend modelling the cost as recurring and growing in line with revenue. Basic EPS increased by 12%, which was slightly higher than the growth in net income due to fewer shares in issue following our shared buyback programme. Today, we're declaring a final dividend of 7.1 pence per share, making total dividends for the year 10.6 pence per share. Now to briefly review net bank debt and capital policy. During the period, the group repaid all of the 30 million drawn of its revolving credit facility and held cash and cash equivalents of 15.3 million. Cash generated from operations was largely used to pay tax or return to shareholders through a combination of dividends and share buybacks. 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. That concludes the financials. I'll now hand over to Catherine to talk through the market dynamics and progress against our strategic priorities.

Thank you, Jamie, and good morning, everyone. Over the past 20 years, the size of the UK car park has grown steadily by just over 300,000 cars per year, reaching over 36 million vehicles. The COVID-19 pandemic disrupted this trend, causing new car production to fall below levels seen during the global financial crisis of 2008 to 2009. Despite these one-off shocks, we expect the UK car park to continue to grow over the long term. This growth is driven by GDP growth, population growth and stable car ownership trends. The consistent change vehicle change cycle in the UK, typically between three and four years, translates this growth into increasing used car transaction volumes each year. We also expect the value of both new and used cars to rise over time. In 2011, the average price of a used car advertised on Autotrader was £9,000. Today, it is over £17,000, reflecting average growth of over 4% per year. This increase is driven by inflation, improved product functionality and the shift towards more expensive electric vehicles. Over the past decade, gross margin percentages have remained relatively consistent, which means that higher vehicle prices typically lead to higher absolute gross profits for retailers. This trend, combined with the growth in transaction volumes, has resulted in an increased gross profit pool, which has enabled us to grow revenues without significantly increasing our take rate. Moving on to slide 17 and looking at both new car registrations and used car transactions. From a new car perspective, supply has continued to improve following the impact of the pandemic in 2020 and 2021, but the growth rate has slowed to 2% over the last 12 months. This can be seen in the chart on the left. The market remains slightly below the level seen pre-pandemic and significantly lower than the highs of 2017. The retail market on new cars sold directly to consumers has been more significantly impacted. This market has not been as low as it is today since the global financial crisis. Over the past 12 months, we've seen manufacturers attempt to stimulate private demand with increasing levels of discounts and finance offers. This has been particularly prevalent with electric vehicles, where the zero emission vehicle mandate is in place. This requires a minimum percentage of registrations to be electric, with significant penalties for failing to achieve the targets. Despite these discounts, private retail sales were down year on year, with the registration offset coming through stronger fleet volumes. The fleet channel saw very little volume between 2020 and 2022 as manufacturers prioritised higher margin retail volumes. As a result, these players have been replacing what has become a much older fleet. We do expect this trend to ease over the coming months as this replacement cycle is now closer to historical norms. As seen in the chart on the right, used car transactions have continued to grow with a 4% increase in volumes over the last year. Over the past 12 months, our audience position has remained strong and both the volume and engagement of buyers has increased. The number of cross-platform visits increased 5% year-on-year to reach a record number of 81.6 million per month. Engagement, which we measure as cross-platform minutes, also increased to 557.2 million on average per month. We also saw increasing use of our mobile app, which has seen total downloads now reach over 22 million. The chart on the right-hand side shows the total minutes spent across an expanded set of competitors, retailers and manufacturers. On average, over the year, Comscore estimated that consumers spent over 10 times more minutes on Autotrader than our nearest marketplace competitor, the combination of Gumtree, Motors, eBay and Kazoo, and 15 times that of Cargurus and Pistonheads combined. Let's move on to consider progress against our strategic priorities. We've made good progress against each of our three strategic focus areas. These areas are closely interconnected. Our platform and our digital retailing capabilities build on the strength of our marketplace and deepen our relationships with both retailers and car buyers. Our marketplace continues to grow and we have seen a record number of car buyers and retailers using AutoTrader. This means we continue to grow and build our unique data advantages through all of the observations captured. Whether it is consumer behavior and interactions, retailer actions and pricing trends, we continue to extend our lead in this area. We have executed our annual pricing and product events successfully, which included the third module of AutoTrader Connect, Trended Valuations and Enhanced Retail Check. We have also significantly enhanced search, including launching a grid view layout, continuous scrolling, and redesigned search filters. As part of our platform strategy, we continue to make the technology and data that we have built and scaled to support Autotrader available to our partners. This is a key differentiator and connects our data and services into key business processes for our customers. we have seen strong and growing engagement from retailers with over a billion calls on our data services in the year. We are also leveraging our data capabilities. We launched CoDriver, a suite of AI-powered solutions to significantly improve both the retailer and consumer experience. We scaled our deal builder trial in the year, enabling consumers to do more of the car buying journey online. We've consistently delivered our pricing and product event in April each year. On the 1st of April, 2017, we aligned all customers to this annual event, which means our customers are familiar with this cycle and expect both in-year product launches and their rents to change on this date. Each year, we deliver more value to retailers through products, data and tools made available as part of these advertising packages. For the first five years, the product focus was broadly around core advertising products. This enabled retailers to produce better quality adverts on our platform with videos, additional images, chat and text functionality, and to have their own dedicated customisable store on Autotrader. The inclusion of these products delivered a compound ARPA contribution of 2% per year. Over time, we have moved beyond launching advertising features to embedding our unique data and scalable technology services to power our customers' businesses. Developing our advertising products remains a source of future product development, but driving retailing performance through data and insights is a significant priority for our customers. The three modules of AutoTrader Connect we have launched has taken us from an advertising platform to an integral part of our customers' operations, allowing them to make higher quality, faster decisions. Usage of these services has continued to grow over the three-year period, with over 90% of retailers now actively engaged with these services. At IPO, we talked about eye control and data products being future growth drivers. By the time we ended financial year 2022, we made £10 million in revenue from just over 3,000 retailers buying these data products. By making these products available to all of our customers as part of their Autotrader subscription, revenue from our data products, including those modules of Autotrader Connect, has been almost £50 million a year. We have shown that we can execute successful events in each financial year, with value to retailers delivered through additional products, as well as underpinning ARPA growth for the year. Given our pipeline of product opportunities, we expect this to continue for many years. Now to talk to this year's event product. Autotrader's data science capabilities, technology platform, and unique data presents new opportunities to create AI-powered products. We are already utilizing these capabilities across a range of products and services to benefit both buyers and sellers on our platform. The next step in this journey is the launch of CoDriver, a suite of AI-powered tools that will improve both the retailer and consumer experience. The first wave of CoDriver includes three components. The first is smart image management, which categorizes and reorders vehicle imagery based on consumer insights, in addition to identifying any missing imagery needed to improve the advert performance. The second, AI-generated descriptions, automatically writes the description for retailers, highlighting the features most important to consumers, reducing a task that took on average over 25 minutes for some retailers to virtually instant. And finally, key selling points that promote the vehicle's characteristics that buyers value the most. We expect these products to significantly improve both the consumer and retailer experience on Autotrader and have seen high engagement levels since launch, with over 300,000 vehicle descriptions generated and over 35 million consumer interactions with vehicle highlights. Retailers and their physical stores will continue to play a critical role in the car buying and retailing process for many years to come. Most consumers are not comfortable buying a car entirely online. They prefer to inspect, test drive and gain support from people throughout the process. We believe this process can be improved by enabling more of the journey to be done online at a time convenient for the buyer. This benefits our customers as significant resources are allocated to managing inquiries and processes that do not ultimately result in a sale. We are in a unique position to connect online journeys, which typically start on AutoTrader, into retailers' systems and processes through both our retailer portal and our API journeys. This is the strategy we have been pursuing with our deal builder product. Feedback on the product continues to be positive from both retailers and car buyers, with deals converting twice as effectively as a regular AutoTrader lead. Over half of all deals are submitted outside of traditional working hours. At the end of March 2025, we had increased deal builder customer numbers by 82% to 2,000, which made the product available on around 84,000 vehicles, an increase of over 100% on last year. Deals generated were three times higher at almost 50,000. Over half of the customers at year end were either paying for the product or had been onboarded on a try-before-you-buy basis, where they were expecting to roll up to paid after an initial offer period. Given this progress and our experience with previous products at Autotrader, we've decided to accelerate the adoption of DealBuilder. This means we'll be making much, but not all, of the current deal builder functionality part of our core advertising proposition. We believe there are significant benefits to this approach. Firstly, we've been onboarding approximately 500 customers every six months. At this rate, it would take a number of years to make the functionality available to all of our customers and car buyers. By building it into our core offering, we'll be able to dramatically accelerate customer adoption. With significantly more vehicles having a version of Deal Builder, we will materially increase the number of deals being submitted on AutoTrader, accelerating the level of buyer engagement on-site. We are confident retailers value the product. While DealBuilder will no longer be monetized separately per transaction, we will be able to accelerate both its adoption and monetization, which we have a long history of successfully doing. This plays to the strength of our subscription business. Future opportunities remain to monetize different elements of the transaction, such as finance and other ancillary products. Importantly, having this functionality on every advert on AutoTrader differentiates our proposition for both buyers and retailers. This has been no small undertaking in terms of engineering and integration work with retailer systems and processes. Having covered previous event products, it is worth providing some context on the opportunities we have to drive performance of our customers' businesses as we look ahead. ARPA growth each year has been underpinned by well-executed events on the 1st of April and in-year product growth. We expect to continue this cycle with a range of products we believe will be valuable to retailers as the industry continues to evolve. Firstly, it has been some time since we have supported an event with advertising products. Retailers are always looking for ways to effectively promote their brands, their propositions and their vehicles. While this is a more mature part of our business, there remain areas we have not fully developed and others where we are yet to begin work. This includes involving our packages, developing our pay-per-click products, improving our messaging capability, and the recently launched Nucar offers product. Our second stream of products is those enabled through our artificial intelligence and data science capabilities. We recently launched CoDriver, a suite of AI-powered tools to help retailers create high-quality adverts more efficiently. There is significant scope for further AI-powered products to improve the buying and selling of cars in the years ahead, all built on our unique data. The evolution of our search experience is also being driven by our work on AI-enabled tools, and will create more opportunities for retailers and better meet buyer needs. Our third product development area is our data and technology products. We have launched data products over the past three events and made them available through both our retailer portal and our AutoTrader Connect platform. The data we are able to provide to retailers is unique and most of it proprietary. We have consistently improved this dataset by acquiring key resources for vehicle taxonomy, integrating build level data from manufacturers and aggregating all of the interactions on our platform. More recently, we have directly sourced the granular vehicle data required to provide our own provenance or vehicle history checks. We have significant opportunities to both strengthen our existing data products, to service them more powerfully on AutoTrader, and to begin to automate their usage in combination with our AI tools. Finally, we have our digital retailing products. A baseline version of our deal builder product will be made available to all retailers as part of our event next year. But this is just the first step. There are further opportunities within digital retailing that will build upon this foundational deal builder functionality made available through packages. We believe some of the biggest opportunities in the future will come from combining our deal builder product with the data and insight we have to better connect engaged buyers with retailers and to deliver a truly omni-channel buying experience. I'll now hand back to Nathan to summarize our outlook for 2026.