Car buying platform Autotrader (AUTO) increased sales and profits for the year to March 2026 despite a difficult industry backdrop. The cash-generative automotive marketplace also unveiled plans to return around £600 million to shareholders in FY27.
So why were Autotrader shares among FTSE 100’s worst performers today?
Well, FY26 results came in shy of consensus estimates, while FY27 profit guidance was also light relative to analysts’ forecasts. Autotrader also flagged flat revenue in April 2026, which it pinned on ‘a lower run rate and a lower price increase’.
Growth engine
Group revenue ticked up 4% to £624.3 million in FY26. This was driven by the core Autotrader platform, where revenue grew 4% to £585.3 million. Autotrader’s operating profit also revved up 4 per cent to £392.7 million.
Unfortunately, consensus called for group sales of £632 million and operating profit of £398.7 million.
Revenue growth slowed to 3% in H2 and was lower in Q4. This reflected ‘more difficult trading conditions’ as well as retailer feedback regarding the company’s Deal Builder product roll-out, which Autotrader ‘moved quickly to address’.
Guidance falls short
For FY27, Autotrader remains ‘comfortable with our current levels of investment such that group operating profit margins, excluding vehicle and accessory sales, will be at least maintained’.
Operating profit is expected to land in the £395 million to £415 million range, below the £418.3 million consensus was looking for. But with an accelerated level of share buybacks, Autotrader expects to motor in with ‘at least high single digit’ earnings per share growth.
Bumper payouts
During FY26, Autotrader returned £463.2 million to shareholders through dividends and accelerated buybacks.
The board believes Autotrader’s share price ‘does not reflect the company’s fundamentals or long-term prospects’. Accordingly, it will allocate more capital to buybacks while continuing to invest in growing the business and paying out dividends.
For FY27, the company plans to return around £600 million to shareholders, through roughly £500 million of share buybacks.
What did the CEO say?
Nathan Coe, CEO, said: ‘We continued to grow both revenue and profits this year, despite a challenging backdrop. Our competitive position has strengthened, with six times more time spent on Autotrader than all our main competitors combined.’
Coe continued: ‘We remain committed to using our brand, technology and proprietary data to benefit car buyers and retailers. AI will significantly enhance our ability to do this which has already been demonstrated through our retailer products, such as Co-Driver and Buying Signals, as well as our improved search functionality for car buyers both on our marketplace and within ChatGPT.’
Autotrader shares have shed almost 50% of their value over the past year, pressured by broader automotive sector volatility and fears over slowing growth.
However, the board clearly believes the stock is oversold. And this could be a good buying opportunity for patient investors. Autotrader has a strong brand, offers a wide selection of cars, and buyers spend considerably more time on Autotrader than all its main competitors combined.
The launch of the Autotrader app in ChatGPT will allow its marketplace to be accessed within AI-driven searches, helping connect buyers with relevant vehicle more quickly.
Read the press release here: https://plc.autotrader.co.uk/investors/
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