Autotrader has seen shares come under pressure as lower-than-expected annual profits overshadowed plans to boost shareholder returns by £600 million over the year ahead.
The car-selling platform reported a 4% rise in operating profits to £392.7 million for the year to March 31, as revenues also lifted 4%.
Pre-tax profits increased 3% to £388.8 million.
But shares in the FTSE 100 firm slumped 9% in Thursday afternoon trading as both earnings and revenues missed forecasts.
The group also revealed dealership numbers fell amid “concerns with the speed and nature” over the roll-out of its AI-driven retailing tool Deal Builder, with the number of dealer forecourts on its books down nearly 1% to 13,942.
Autotrader said: “Whilst this was disappointing, we have listened carefully to customer feedback, taken proportionate action and remain focused on winning back retailers and strengthening our long-term partnership with customers.”
The group announced it would increase shareholder returns by about £600 million in 2026-27, which will include around £500 million in share buybacks as well as dividend payouts.
Autotrader’s returns for investors would reach £1 billion over 2026 and 2027, it added.
Chief executive Nathan Coe said the higher profits and sales came “despite a challenging backdrop”.
“Our competitive position has strengthened, with six times more time spent on Autotrader than all our main competitors combined,” he said.
Autotrader is predicting further growth in earnings over the new financial year, with the group pencilling in operating profits of £395 million to £415 million.
Mr Coe put faith in the firm’s plans to ramp up the use of artificial intelligence (AI).
He said: “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.”