- Mediahuis owns used car seller CarsIreland and vehicle data supplier Cartell
- Webzone is headquartered in Dublin and trades under the brand name Carzone
- Broker Peel Hunt has upgraded its Auto Trader stock recommendation to Buy
Auto Trader Group has agreed to sell a car advertising website to Ireland’s leading media publisher.
Mediahuis, which controls the Belfast Telegraph and Irish Independent newspapers, has just bought Auto Trader subsidiary Webzone Limited for €30 million (£26 million), the FTSE 100 group announced.
The company, headquartered in Dublin and trading under the Carzone brand, was founded in 1998 and has grown to become the second largest retail and consumer car marketplace in the Republic of Ireland.
Deal: Auto Trader Group said Mediahuis, which controls the Belfast Telegraph and Irish Independent newspapers, has just bought its subsidiary Webzone Limited
In the past financial year, the division contributed just £4.9 million to total group sales and £1.3 million to operating profit, representing less than 1 percent of Auto Trader’s total business.
It also provided just 4 percent of the Manchester-based company’s full-time equivalent employees and average shopping malls.
Nathan Coe, Auto Trader’s chief executive, said the divestment is part of the group’s strategy to focus on its primary market, the UK.
The acquisition of Webzone by Belgium-based Mediahuis will bring the online company under the same name as used car seller CarsIreland and supplier of vehicle data Cartell.
Xavier van Leeuwe, the chief executive of Mediahuis Marketplaces, said the brand “has a long and incredible track record in the Irish car industry.”
He added: ‘The culture of excellence of its employees is an important addition to the expertise within our group.
“Mediahuis will provide an unparalleled offering to the entire Irish car industry, manufacturers, retailers and consumers, helping us build the company that will lead the industry for years to come.”
Auto Trader Group Shares were up 3.25 percent to £5.02 on Monday, although their value has fallen by more than a third so far this year.
Russ Mould, investment director at AJ Bell, said: “Like a forgotten £20 note in the glove box, web-based car salesman Auto Trader has delighted the market with the sale of its €30 million Webzone business.”
He added: “The division wasn’t highly regarded and there probably wasn’t a huge amount in the share price for it, so getting a useful injection of cash and shining a headlamp on the valuation is of no use to Auto Trader.” done. harm investors.’
Due to the stock’s weak performance in 2022, broker Peel Hunt has now upgraded its recommendation for Auto Trader stocks from Hold to Buy.
The company’s declining market capitalization came amid a wider slowdown in auto sales as Britons increasingly struggle with rising energy bills and interest rate hikes.
Nevertheless, car dealers and advertisers with car ratings continued to deliver solid financial results thanks to supply chain disruptions, which pushed up the prices of both new and used vehicles.