Auto Trader Group has agreed to sell an auto classifieds website to Ireland’s most prominent media publisher.
Mediahuis, which controls the Belfast Telegraph and Irish Independent newspapers, has just purchased Auto Trader subsidiary Webzone Limited for €30million (£26million), the FTSE 100 group announced.
Headquartered in Dublin and trading under the brand name Carzone, the firm was founded in 1998 and has grown to be the second-biggest automotive marketplace for retailers and customers across the Republic of Ireland.
Deal: Auto Trader Group said that Mediahuis, which controls the Belfast Telegraph and Irish Independent newspapers, has just purchased its subsidiary Webzone Limited
For the last financial year, the division contributed only £4.9million of total group revenue and £1.3million of operating profit, representing less than 1 per cent of Auto Trader’s overall business.
It also provided only 4 per cent of the Manchester-based company’s full-time equivalent employees and average retailer forecourts.
Nathan Coe, the chief executive of Auto Trader, said the divestment formed part of the firm’s strategy to focus on its primary market of the UK.
Webzone’s acquisition by Belgium-based Mediahuis will bring the online firm under the same rubric as used car seller CarsIreland and vehicle data supplier Cartell.
Xavier van Leeuwe, the chief executive of Mediahuis Marketplaces, said the brand ‘has a long-standing and incredible track record in the Irish automotive space’.
He added: ‘The culture of excellence of its employees is a significant addition to the expertise within our group.
‘Mediahuis will present an unrivalled offering to the entire Irish motor industry, manufacturers, retailers and consumers alike, allowing us to build the business that will lead the industry in years to come.’
Auto Trader Group shares had risen 2.4 per cent to 497.9p by the late afternoon on Monday, although their value has declined by 31 per cent so far this year.
Because of the share price’s weak performance in 2022, broker Peel Hunt has now upgraded its recommendation on Auto Trader stock from Hold to Buy.
The decline has come amidst a wider slowdown in sales across the motoring sector as Britons increasingly struggle with soaring energy bills and interest rate hikes.
Car dealerships and auto classifieds advertisers have nonetheless posted robust financial results thanks to supply chain disruptions boosting prices of both new and used vehicles.
Russ Mould, investment director at AJ Bell, said: ‘Like a forgotten £20 note in the glove box, web-based car seller Auto Trader has pleased the market with the €30million sale of its Webzone business.’
He added: ‘The division wasn’t high profile, and there probably wasn’t a huge amount in the share price for it, so to secure a helpful cash injection and shine a headlamp on its valuation won’t have done Auto Trader any harm with investors.’
