The Sunday Times reports that its owner News Corp is looking to launch a rival to Auto Trader.
Describing Auto Trader as Guardian Media Group’s “last remaining cash cow” the paper notes a fall in pre-tax earnings at parent company Trader Media Group. GMG owns 50.1 per cent of TMG and publishes The Guardian which has been in a thorn in News Corp’s side for several years via its investigation into the hacking scandal.
The Sunday Times reported yesterday:
Pre-tax earnings at Trader Media Group ( TMG), which owns the Auto Trader magazine and online service, fell to £22m in the 12 months to April, against £94m in the previous year when the figures were flattered by a one-off accounting gain, according to accounts filed at Companies House.
Operating profits, which strip out one-off charges, fell by £2m to £ 106m as the firm, owned by Guardian Media Group (GMG) and Apax Partners, the private equity firm, warned that the economic downturn was taking its toll. ‘There is clear evidence of a recessionary effect in the used-car market,’said TMG, with growth ‘slowing down’in the second half of its fiscal year.
That is a setback for GMG, whose financial future hinges on securing a money-spinning sale or stockmarket float for TMG in the coming years.
News Corp, the owner of The Sunday Times, is said to be planning to launch a website to compete with Auto Trader.
Trader Media Group filed its year-end statement two months ago. Yesterday’s Sunday Times story (£) – headlined ‘Guardian hit by slide at used-car cash cow’ – appears to draw on Companies House documents filed this week for the same period .
That year-end statement picked out the following financial highlights:
Underlying revenue £257.2 million (2011: £254.4m)
Digital revenue up 11% to £202.0 million
Underlying EBITDA up 10% to £142.9 million (2011: £129.8m)
Digital EBITDA up by 20%; now contributing 85% (2011: 77%) of Group EBITDA
Last month GMG reported pre-tax losses of £75.6m.
GMG said the loss, which contrasts with pre-tax profits of £9m in 2011, was down to an exceptional charge relating to the sell-off of its subsidiary GMG Radio.
The company’s annual report also revealed that the combined value of its cash balance and investment fund has risen from £197.4m to £225.8m, reflecting dividends from its shares in Trader Media Group (TMG).
Revenue was down slightly at £254.4m (2011: £255.1m) and the company recorded operating losses before exceptional items of £64.4m, up from £54.5m in 2011.