Auto Trader shares jump as group sells Irish car market Webzone to Belfast Telegraph owner for £26m

  • Mediahuis owns used car retailer CarsIreland and vehicle data provider Cartell
  • Webzone is headquartered in Dublin and trades under the Carzone brand
  • Broker Peel Hunt raised its recommendation on shares of Auto Trader to “Buy”.

Auto Trader Group has agreed to sell a motoring classifieds website to Ireland’s most prominent media publisher.

Mediahuis, which controls the Belfast Telegraph and Irish Independent newspapers, has just acquired Auto Trader subsidiary Webzone Limited for €30m (£26m), the FTSE 100 group has announced.

Headquartered in Dublin and trading under the Carzone brand, the firm was founded in 1998 and has grown to become the second largest automotive marketplace for retailers and customers across Ireland.

Deal: Auto Trader Group said Mediahuis, which controls the Belfast Telegraph and Irish Independent newspapers, has just acquired its subsidiary Webzone Limited

In the last financial year, the division generated just £4.9m of total group revenue and £1.3m of operating profit, representing less than 1 per cent of Auto Trader’s total business.

It also provided just 4 per cent of full-time staff at the Manchester-based company and medium-sized shopping centres.

Nathan Coe, chief executive of Auto Trader, said the divestment was part of the group’s strategy to focus on its core UK market.

The acquisition of Webzone by Belgium-based Mediahuis will put the online firm in the same category as used car dealer CarsIreland and car data provider Cartell.

Xavier van Leeuw, 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 employee excellence is a significant addition to the experience within our group.

“Mediahuis will bring an unrivaled proposition to the entire Irish automotive industry, manufacturers, retailers and consumers, enabling us to build a business that will lead the industry for years to come.”

Auto Trader Group shares rose 3.25 per cent to £5.02 on Monday, although their value has fallen by more than a third this year.

Russ Mould, investment director at AJ Bell, said: “Like a forgotten £20 note in the glove compartment, online car retailer Auto Trader has delighted the market with the sale of its Webzone business for €30m.”

He added: “The division didn’t matter much and there probably wasn’t a huge amount in its share price, so it wouldn’t take much for Auto Trader to get a useful cash injection and lighten its valuation. damage with investors”.

Due to weak share price performance in 2022, broker Peel Hunt upgraded its recommendation on Auto Trader shares from Hold to Buy.

The fall in the company’s market capitalization came amid a wider slowdown in sales in the car sector as Britons increasingly grapple with soaring energy bills and rising interest rates.

Auto dealerships and car advertisers, however, continue to post strong financial results thanks to supply chain disruptions that are driving up prices for both new and used cars.