Auto Trader has warned investors that Autorama, the new car leasing marketplace it bought in a deal worth up to £200m, is set to lose around £11m.
The Manchester-headquartered group completed the deal in June for an initial consideration of £150m while an additional £50m has been deferred "subject to customary performance conditions" in a year's time.
Autorama has created a digital platform which aggregates leasing deals from multiple funders and OEMs under its Vanarama brand.
READ MORE: Click here to sign up to the BusinessLive North West newsletter
However, in Auto Trader's half-year accounts, the group said Autorama is likely to make an operating loss of c.£11m for the full year, with "continued supply challenges across all vehicle types resulting in lower delivery volumes."
Auto Trader Group said its revenue increased in the six months to September 30, 2022, from £215.4m to £249.8m, while its pre-tax profits dipped slightly by £2m to £148m.
Chief executive Nathan Coe said: "Our first half results demonstrate the strength of our position with car buyers and the depth of partnership we are building with customers.
"Achieving this in a period impacted by high levels of economic uncertainty is a credit to both our people and customers, and provides confidence in navigating the rest of the year.
"Longer-term we are well placed to grow as we further develop the core Auto Trader business, extend it to enable car buyers to complete more of their purchase online, and provide the industry-leading data and technology platform for our customers."
READ NEXT:
How a top hotel is tackling the cost of living crisis after emerging from 'pure survival mode'
Jaguar Land Rover cuts losses thanks to two Range Rover models boosting sales
City centre venue owed over £200,000 as it closed 'with a heavy heart'
Britannia ranked UK's worst hotel chain for 10th consecutive year
