Auto trader off to a strong start
- Credit: PA
Shares in used car website Auto Trader have got off to a strong start after the company made its stock market debut in the biggest flotation of the year.
The firm, which claims to be the UK's largest car sales website, priced its shares at 235p, valuing the business at £2.35 billion. They later rose to as much as 273.75p.
The company, founded in 1977 as a classified ad magazine, now attracts 35 million visits to its websites a month.
The business sold 59% of itself to new shareholders raising £437 million, which it says it will use to pay off debt.
It added that existing shareholder, buyout firm Apax Europe, will make £926.2 million from selling a stake in the business.
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The website firm, run buy chief executive Trevor Mather, reported underlying earnings of £136.1 million on sales of £237.7 million in the year to March 30 last year.
It added that over the last two years the group's online revenues have increased by around 7% annually.
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Since last December the business said it has 'continued to benefit from favourable market conditions in the UK and broader confidence across the UK automotive industry.'
The firm, which will join the FTSE 250, announced its intention to float last month.
At the time chairman Ed Williams said: 'Early and sustained investment in the internet and digital technologies has allowed our customers to benefit from the advantages of the internet.'
The group was known for its magazine full of used-car adverts but it began to go online from 1996 and the final publication of the print magazine came in June 2013.
In the mid-90s the group diversified into a number of foreign markets including Holland, South Africa and Italy. But in 2013 the business sold off most of its overseas operations and now focuses on the UK and Ireland.