Autotrader Group Plc (ATDRF) Q4 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

We anticipated trading this year to be tougher as a result of profitability challenges for retailers, a shortage of stock in some age cohorts and fast speed of sales. Retailer profitability was more challenging than we expected due to a combination of new car profitability in part due to the ZEV mandate and cost increases following the government budget last year. This led to intense scrutiny on every cost in their business with many stories of profit declines, redundancies and store portfolio restructures. The pressure on retailer profitability is most acute in November and December, which combined with feedback on our accelerated rollout of DealBuilder. This was amplified across social media, including some factual inaccuracies which were since clarified for customers. Following this period, we have seen higher cancellation levels than in previous years, which has impacted both FY26 and the run rate into FY27. However, despite these challenges, we have continued to grow revenue, profit and earnings per share. Perhaps more importantly, retail numbers, stock and upsells have all been growing since the end of the financial year, so we are past the low points. Furthermore, the core metrics underpinning AutoTrader are in a strong place. Supply shortages will subside, speed of sales has been stable all year, retailers are returning and now years into a janty KI, we're confident that the core of what we do will remain relevant for the future. It's a confidence that is growing as we continue to build, scale and monetise products incorporating AI. In previous technology transitions, including the internet, mobile, native apps, hyperscalers, big data and AI, we have backed the technology and emerged the other side better for car buyers, for retailers, for our people and shar...