AutoTrader Puts Digital First, Shifting £463 Million Away From Print

It’s one of the UK’s best-regarded, most-digital media businesses. So how is Trader Media Group, the car classifieds publisher, faring?

The group, in 2010 fiscal-year earnings, says digital now accounts for 75 percent of its total EBITDA, which was £115.8 million (down two percent).

Trader Digital revenue was £140.3 million (up 7.8 percent), or 62 percent of the group’s £250.9 million total (down 10.4 percent) – that’s up from 52 percent from a year earlier.

Resulting from a related restructure in to three divisions during the year, (1) Trader Digital’s now sits as the dominant and principal part of a group that still includes the (2) Trader Publishing (the AutoTrader newspaper) and (3) Trader International (a cross-media division operating in Ireland, Italy and South Africa).

Though the business is fundamentally well-performing, this restructure, carried out in january, resulted in TMG writing a huge £463 million off the value of this newly-defined, print-focused Trader Publishing unit. From the annual report: “Previously, there was one operating segment for the Auto Trader brand which included the magazines and … Therefore, an impairment has been identified for the publishing segment reflecting the effect of advertising spend migrating online.” Though it pushed the group to a £503.3 million pre-tax loss, it’s a one-time accounting entry.

Across the group, which is owned by Guardian Media Group and Apax, TMG’s stock of listed cars grew back up by 8.2 percent from an auto-buying downturn that was more pronounced in 2009.

“The group continues to see a structural decline in publishing,” says chairman Tom Hall in the annual report, talking about “a successful transition from a magazine-based business to a website-driven offering”. now claims 40 percent of the car classifieds segment, Hitwise says, with 10 million monthly uniques (Omniture).

The company acquired Trademail and 2ndbyte to boost its digital offering.

Of course, whilst Trader Media Group’s historical core product was a paper of sorts, the group is somewhat blessed that it is not in the content publishing business. Instead, its raison d’être is quantitatively-driven ad listings – the kind of thing a searchable digital offering can satisfy far better than paper.

Disclosure: Our publisher ContentNext is a wholly owned subsidiary of Guardian News & Media.