Good morning, everyone, and welcome to Auto Trader's full year results for 31st of March 2019. Before we get started, I want to touch on the announcement that I made at the end of April regarding my upcoming retirement. It really has been the greatest privilege of my career to lead Auto Trader through another successful phase of its life. It really is an amazing business with incredible dedicated employees who have helped to create the successful company that it is today. The timing of my decision is down to two things. Firstly, my youngest daughter will leave the family home next year, and as my family start out on the next phase of their lives, I want to be there for them as they have been there for me for the last 30 years of my career.
Secondly, this team that I leave behind are ready to step up and lead Auto Trader. Nathan has effectively been running the business alongside me for the last two years. He's ready to lead this company, and similar to what happened to me at my previous company, Thoughtworks, which is still prospering under the leadership that succeeded me six years ago, I just know it's time for me to move aside. Additionally, I'm delighted that Catherine, who joined us in 2017, is stepping up to the role of Chief Operating Officer and is now a member of our board.
Catherine brings a wealth of experience from senior positions at both Trainline and Addison Lee, and has had a measurable impact on the operations of Auto Trader to date. Jamie steps up from Deputy CFO to CFO Designate, a successor to Nathan as CFO, and will join the board in due course. It really is hugely satisfying that we have been able to recruit these roles internally to execute on our succession plan, and it gives me great pleasure to introduce both Catherine and Jamie to you here this morning to present our full year results. On to the highlights. I'm delighted to say that we've had another excellent year despite tough market conditions. We've seen significant uptake of both new and long-standing products, which has accelerated our revenue growth from that reported in the first half, and enabled us to maintain double-digit operating profit growth.
Revenue's up 8%, which has come predominantly from our retailer customers who have chosen to take a greater volume of our products. Through continued operating leverage and one quarter's profit contribution from our new joint venture, operating profit grew at 10% and margin has improved two percentage points to 69%. Basic EPS growth of 18% also benefited from the joint venture. We recognized a one-off non-cash GBP 8.7 million profit on the disposal of our asset, Smart Buying, as it transferred into the new entity. Underlying growth came through low double-digit growth in net income and fewer shares in issue as a result of our continued share buyback program. We proposed a final dividend of GBP 0.046, which when added to the GBP 0.021 interim dividend, gives a total of GBP 0.067.
Cash generation from operations was up 13%. Cash return to shareholders in the period was GBP 151 million, delivered through a combination of dividends and the repurchase of shares. Finally, we continue to delever with debt repayments of GBP 30 million in the year, taking leverage down to 1.2 times. In terms of operational highlights, our average revenue per retailer forecourt, or ARPF, grew by an average of GBP 149 per month or 9% when compared to the previous year. As anticipated, this was driven by excellent growth in our product leader, predominantly due to the success of our dealer finance product launched in April 2018, and the continued upsell of our advanced and premium advertising packages. The number of cars on site was up 2%, despite the anticipated underlying used car stock being marginally down year-on-year.
From August last year, we launched our physical new car product, which allows retailers to surface their brand-new cars available for sale now to our consumer audience, and this drove the year-on-year growth. We exited the year with over 30,000 of these new cars on site, which contributed an extra 12,000 to the average over the year. Pleasingly, retailer forecourts remain stable, actually increasing by 27 year-on-year. In terms of our audience metrics, we changed from absolute minutes as measured by Comscore to cross-platform visits measured internally by Google Analytics. We made this change because we've consistently not seen the same trends internally as those measured externally. In 2019, we've grown the number of cross-platform visits by 1%, but have seen full-page advert views decline 3% year-on-year, which Catherine will talk to in more detail later.
We still believe those external measures are still relevant when measuring audience share across automotive sites and against competitors. Looking at Comscore, we've marginally grown our share of minutes and are now five times larger than our nearest competitor in terms of minutes spent on site, versus four times larger a year ago. Finally, on operational highlights, the number of employees declined to an average of 804 for the period, driven by the transfer of 15 employees to our joint venture on the 1st of January 2019. Almost 18 months ago, we presented this horizon slide at our capital markets day, and it continues to reflect how we think about our strategy.
It demonstrates how we relentlessly focus on and manage the current performance whilst also focusing on maximizing a limited number of future opportunities for growth. I use the word focus quite deliberately, as there are another 10 things we could put on here, as well as creating further horizons with the thinking around connected cars, ride sharing, and autonomous vehicles. What we're saying is the most important things we can focus on, the biggest opportunities that are in front of us, are on this slide. In our core, we believe there continues to be a strong runway for growth, underpinned by continuous improvement of the car buying experience and helping retailers improve their profitability. We continue to improve the tools we offer in how retailers target in-market car buyers, how retailers manage their forecourts based on data, and how they advertise their financing.
We've identified the adjacent opportunity to our core marketplace in new car sales and the way in which our retailers source vehicles. We believe the scale of our consumer audience and the relationships we have unlock these opportunities. In future, we believe the evolution of both our products and our consumer experience, which aims to keep consumers online for longer throughout the buying journey, can result in greater amounts of the transaction being completed online. We've made significant progress against these growth horizons in our broader strategy this financial year, with more detail on the majority of these given by Nathan later in the presentation. We've increased the penetration of our highest two advertising package levels, Advanced and Premium, to 19%, an improvement from 12% reported this time last year and 15% reported at the half year.
We've maintained the take-up of our dealer finance product through the year. We've launched our physical new car product and had over 30,000 of these new cars on site at the end of the year. We've relaunched our managing products, Retail Check and Retail Accelerator, formerly known as i-Control, with significantly improved data analytics. Finally, following clearance from the Competition and Markets Authority in December, we entered into a JV with Cox Automotive to form Dealer Auction, as we look to use digital to disrupt the existing B2B auction market. It's been a great year for progress, and we really have a range of products and initiatives at varying stages of their life cycle as we maintain a strong pipeline for growth. I'll now pass over to Jamie to take us through the financials in more detail.
Thank you, Trevor, and good morning, everyone. Before I go through the financials, as mentioned in the half year, I wanted to point out that we have adopted three new accounting standards for this financial year. IFRS 9 and 15, relating to revenue and financial instruments, have had no effect on our results. However, IFRS 16 for leases has had a small impact on costs, and therefore profit. We have restated prior years to reflect this impact, and a reconciliation of that restatement is included within the appendix. We have seen good top-line growth, with revenue up 8%, which has been predominantly driven by both retailers and manufacturers adopting new products launched in the last two years.
As with past years, growth achieved in our core trade segment has been a key contributor, growing at 8% and driven by a 9% increase in average revenue per retailer or ARPA, versus the prior year. Also within trade, we saw a continued decline in home trader pay-as-you-go listings. Although there has been some switching within this line towards dealers opting for an Auto Trader package subscription, resulting in slightly higher volumes of retailer forecourts, which then falls within the retailer line. Other, which was largely attributable to Motor Trade Delivery, grew in the year by 27%, albeit off a relatively low base. As discussed in the previous two sets of results, consumer services continued to see lower volumes of private listings. Although the second half of 2019 has seen some improvement, which was partly due to package changes, resulting in improved mix and therefore overall yield.
There was a small drop in motoring services as we discontinued a low-yielding display product, the impact of which outweighed growth from our third-party finance and insurance partners. Manufacturer and agency grew 18% year-on-year. The level of growth, which was skewed towards the first half of the year, was largely driven by in search. In the second half of the year, we believe we have seen an impact from well-documented uncertainties resulting from Brexit and cost pressures facing both car manufacturers and their advertising agencies. Now on to ARPA, the key driver of our trade revenue. As Trevor said earlier, total ARPA has grown GBP 149 or 9% when compared to the same period last year, and was consistent with that achieved in 2018.
Average retailer forecourts were also reasonably consistent year-on-year, although we did perform better in the second half, with Q4 showing our highest volume of retailers since Q1 of 2017. The product lever, which as anticipated, was the largest contributor of ARPA growth for the year, has been a great success. As a business, we have been consistently investing in our product set and believe this can sustain growth for many years to come. The key drivers for the year were continued upsell of our Advanced and Premium packages and the introduction of our dealer finance product. In addition to these, we introduced two new product features, stock exports and dealer profile pages, included within all packages from April 2018, and also saw small levels of growth in our managing forecourts.
All these gains were offset by a small headwind, part of which from the transfer of revenue into our joint venture in the fourth quarter, and remains an ARPA headwind for the first three quarters of the next financial year. The chart on the right, via the turquoise line, shows the volume of live cars on site for the three years to the end of financial year 2019, which we have split to show the trend in underlying live used car stock. Our new car proposition, which resulted in an additional 12,000 cars being included in the full year average and driving the 2% year-on-year increase, is currently unmonetized and has no impact on revenue or ARPA. Underlying live used car stock saw a small decline year-on-year, which was largely through private listings and pay-as-you-go home trader listings, which again does not impact ARPA.
Live stock from retailers was broadly flat year-on-year. As discussed in November, the first half of the year was impacted by restricted supply, particularly in younger vehicles. This improved through the second half of the year, aided by greater focus from large groups on used cars. With ARPA only impacted by paid for subscription stock versus the live stock just commented on, the stock lever was down GBP 22 in the period. In line with our half year guidance, which with live volume flat, was due to the mix in yield. Finally, the increase in price of GBP 50 related to an effective increase of just under 3%, of which the majority was delivered in April 2018, and was broadly consistent with that achieved in the prior year. Just a reminder, the costs for comparative periods have been restated following the implementation of IFRS 16.
Cost growth of 3% in the period through growth in people, marketing, and other costs, marginally offset by a slight saving in depreciation and amortization. As shown at the half year, you will notice a change in the presentation of people costs, where we have combined cash costs with share-based payments. This year has seen a change in our remuneration policy, where a greater proportion of performance-related pay is settled in shares. The combination of the two gives a fairer like-for-like comparison. Headcount reduced by 20 in the period, although there was some small impact from employees transferring out to our new joint venture in the fourth quarter, with the remaining decline being down to some small efficiencies and the timing of vacancies.
The growth in costs was driven by an underlying increase in salaries as we continue to attract and retain the best digital talent in a very competitive market. We lapped a low comparison period in share-based payments where there was a one-off credit in 2018. Marketing costs grew in line with revenue and remained at 5% of revenue. Other costs saw low levels of growth at 2%. Finally, our depreciation and amortization was marginally lower. As a reminder, our low levels of CapEx and depreciation are not a reflection of low levels of investment in our business. We have around 300 people in product and technology who are continuously improving our platforms and developing new products for our customers, the costs of which are taken in full through our P&L in people costs.
In addition to this, we are making a greater investment in new public cloud-based solutions, which over time will replace our physical data centers and equally will not be capitalized. Use of the public cloud maintains security and resilience of our platform, but importantly, it also lowers the risk and enhances the speed associated with software releases, demonstrated by the 15,000 releases during the year, three times that we achieved in the prior year. The GBP 2.3 million of CapEx that we did spend in the year was largely made on hardware and property. With revenue up 8%, costs up 3%, and a GBP 0.9 million contribution from share of profits from joint ventures, operating profit grew by 10%, and our operating profit margin increased another two percentage points to 69%.
Cash generated from operations was GBP 30.1 million higher at GBP 258.5 million, reflecting profit growth and a high level of cash conversion driven by particularly strong performance in terms of customer payments and collections. The statutory income statement outlines areas beyond our revenue and operating costs. Finance costs of GBP 10.2 million were relatively flat year-on-year. GBP 2.8 million of costs was due to amortization of debt issue costs, of which GBP 2.2 million was associated with our former loan facility, which has now been fully amortized. Following the adoption of IFRS 16, finance costs relating to leases were GBP 0.9 million, with the remaining GBP 6.5 million being interest costs. We also recognized a one-off non-cash profit on disposal of subsidiary of GBP 8.7 million created by the transfer of our Smart Buying business to the joint venture, which was non-taxable.
Our profit before tax was GBP 242.2 million, and our effective tax rate was just over 18%. When allowing for the non-taxable profit on disposal of subsidiary, it remains in line with standard U.K. rate. Basic EPS growth of 18% was also impacted by the same profit on disposal of subsidiary, which was a one-off. Underlying growth came through low double-digit growth in net income and fewer shares in issue as a result of our continued share buyback program. Finally, as Trevor said in the financial highlights, we are proposing a final dividend of GBP 0.046, bringing our total dividend for the year to GBP 0.067 per share. Moving now to capital structure. As referenced at the half year and previously mentioned, the group signed a new GBP 400 million, five-year revolving credit facility.
I'm pleased to be able to report following year-end, we have extended the majority of this facility for an additional year to June 2024. The new facility has no bearing on our stated capital allocation policy, which remains unchanged. Cash generated from operations of GBP 258.5 million was used to pay GBP 2.3 million of CapEx and lease payments of GBP 3.1 million. As part of the agreement to enter into the joint venture, we paid GBP 19.7 million to Cox Automotive. In cash terms, we paid GBP 6.6 million of interest, which, as previously mentioned, is lower than the P&L charge due to amortized debt issue costs and finance costs relating to leases. There were GBP 3.3 million of fees associated with the refinancing. Tax paid was GBP 42.2 million, which lags the P&L by six months.
GBP 1.9 million was also recognized as our 2015 Save As You Earn share scheme reached maturity at the end of 2018. Of the remaining free cash flow, GBP 57.6 million was paid in dividends relating to last year's final dividend and this year's interim dividend. GBP 94 million, including fees, was used to buy back shares at an average price of GBP 4.61. In total, we returned GBP 151.1 million to shareholders in the year, as well as repaying GBP 30 million of debt. That concludes the financials. I'll now pass over to Catherine to take you through the current market.
Thank you, Jamie. Our revenue is primarily driven by the number of used cars that are listed on our marketplace. The overall size of the U.K.'s car park continues to grow, and this underpins transaction volumes. Despite this, used car transactions in the 2019 financial year decreased by 0.9% year-on-year. This level of decline has moderated since the previous financial year. We believe this trend is likely to continue throughout calendar year 2019, where transaction volumes are likely to be marginally down. We are also influenced, though to a smaller degree, by new car sales, where we earn revenue from manufacturers advertising on our platforms. New car sales influence used car supply, both in terms of part exchange volumes and used vehicle supply in the subsequent one to three years.
With the launch of our physical new car product for franchise retailers in the last financial year, we're likely to see some volatility in our livestock. This may be impacted by new car sales more than we have seen previously. In terms of new car sales, the last financial year saw an improvement on 2018, being down only 3.7%. This was in comparison to a decline of 11% in the prior year. There were some large year-on-year swings around August and September. These months were impacted by the Worldwide Harmonized Light Vehicle Test Procedure, the WLTP changes. Under this legislation, which came into effect on the 1st of September, vehicles that do not meet the new emission standards cannot be registered. This pulled forward a significant volume of new car sales into August, which was followed by a subsequent decline in September.
The remainder of the year generally saw small year-on-year declines each month as supply constraints and Brexit concerns remain. We anticipate the current trend to continue until there is greater clarity on wider macroeconomic issues. As mentioned, new car transactions influence the used car market over the subsequent one to three years. This supply factor is certainly one driver of used car transactions, but it is not the only one. This is because the fluctuation in the volume of new car registrations is small relative to the 35 million cars in the U.K. and the eight million or so used car transactions every year. The first chart, with the more significant impact on the number of used car transactions, is how many cars there are and how often that they change hands. The first chart shows that the U.K. car park has been growing steadily for several years.
Cars are lasting longer, the scrappage rates remain below the level of new car registrations. Whilst the car park is getting bigger, it doesn't necessarily mean that there will be more used car transactions. The second factor is how frequently U.K. consumers change their cars. In the U.K., this is relatively stable at about once every three to three and a half years. As you can see in the middle chart, consumers have been changing their cars slightly less regularly over the last two years. That said, the market remains more active than during the last recession. It is likely that some of the current macroeconomic uncertainty has weighed on consumers' willingness to change vehicles. However, we believe the prevalence of three to four-year finance contracts within both the new and used car markets will mean it is unlikely that consumers change their cars much less frequently.
It should also be noted that subscription and used car PCH deals are not included in the transaction or turn number. Whilst these models are in their infancy, we believe their share of market will grow, they will need to be considered in the future in this analysis. The combination of the total U.K. car park and consumers' change cycle generates the total number of car transactions we see each year, as shown in the third chart. In calendar year 2018, 35 million cars turned on average every 3.4 years and resulted in 10.3 million transactions, of which 2.4 million were new car sales and 7.9 million were used cars. We continue to publish a monthly price index of trade cars advertised on Auto Trader. The average like-for-like price of a vehicle advertised has increased steadily in recent years.
During the last financial year, prices rose for all three fuel types, even diesel. This suggests used car demand from consumers remains strong across fuel types and provides a helpful tailwind for retailer revenue growth. We continue to exhibit clear audience market leadership. As you can see from the chart at the top of this slide, which shows share of cross-platform minutes as measured by Comscore, we're approximately five times larger than our nearest competitor, Gumtree, an increase from four times larger a year ago. We're 18 times larger than PistonHeads, 39 times larger than Motors, and 44 times larger than CarGurus. You'll see that our relative position has not changed meaningfully for some time. As previously mentioned by Trevor, here we show cross-platform visits and full-page advert views, which have grown 1% and declined 3% year-on-year respectively.
We have moved away from reporting absolute measures prepared by third parties, as the trends do not reconcile with what we see in our internal reporting. We continue to review Comscore, Hitwise, and other data sources to track our relative performance, but we use them all as a guide to directional movements in relative share. The decline in ad views was also evident in the number of minutes spent on-site, as measured by Google Analytics. However, we continue to see positive trends in engagement on our platforms. The volume of Part Exchange Guide quotes provided to consumers increased to 2.4 million in 2019. We saw nearly 15 million finance calculator interactions in the year, and most importantly, we grew the volume of leads provided to customers, as measured by calls, emails, chats, and texts year-on-year, increasing the value delivered to our retailer customers.
I'll now pass over to Nathan to take you through our product section and the outlook statement.
Thank you, Catherine. We continue to invest in our data-driven managing products, which we completely rebuilt and relaunched during the course of the year as Retail Check and Retail Accelerator, formerly known as i-Control. The new products represent a significant enhancement with new and improved data analytics, design, goal setting, and reporting, all delivered on a mobile-optimized platform. The number of retailer forecourts using one of these products at the end of the year was 3,200 versus 3,000 last year. We have over 39% of trade stock being managed using one of these data intelligence solutions. We now provide rich evaluation data and a proprietary retail rating, which takes account of supply and demand, enabling retailers to get a more accurate view of how likely and how quick a vehicle will sell on the live retail market.
Building on the success of its predecessor, i-Control, Retail Accelerator takes a retailer's business goals and creates a daily action plan aligned to their desired stock turn and margin. It enables them to manage their inventory more effectively by constantly tracking changing market conditions and delivering alerts on valuation changes, incorrect pricing, and aging stock, as well as dynamic performance reporting, allowing them to improve their competitive position. You may notice a small drop in customers paying for the product since September, which was in part down to sales focus on migrating existing customers to the relaunched versions, but we also saw a large customer choose to invest more aggressively in stock at the expense of their managing product.
As touched on by Trevor, we have made a significant step forward in new cars, launching a stocks-based product, allowing retailers to upload physically available new cars at current retail prices, much the same way they have been doing for decades with their used car stock. We had over 30,000 of these physical new cars on site at the end of the financial year on a free trial. There remains significant room for growth, as we estimate there are a further 90,000 of these cars that are not actively being marketed online. Both consumers and retailers are showing strong appetite for the offering, and nine in 10 consumers state that they would value a site where they could compare brand-new cars available at local dealers. Importantly, these vehicles have discounts applied, allowing consumers to better understand their options and the offers available.
However, the technical and operational challenges to get these cars online has proven to be high. We are pleased with the progress we have made and will continue to make further improvements in the months ahead. At present, we're offering this product on a free trial basis and intend to commence charging during the course of this financial year. Much has already been said about the joint venture we entered into with Cox Automotive in the fourth quarter of our financial year. As a reminder for everyone, the new business Dealer Auction has seen three businesses come together, which in time will combine onto a single platform and single commercial model. Cox Automotive, the world's largest automotive service organization, transferred both Dealer-Auction.com, which offers an online auction of trading vehicles from U.K. franchise dealers, and Manheim Online, the online remarketing services division of Cox Automotive, to the joint venture.
Auto Trader transferred Smart Buying, formerly known as AutoTrade Mail, our retailer-to-retailer platform. I'm pleased to be able to report that the initial period has gone well. Dealer Auction transacted just over 30,000 vehicles between January to March 2019, and the Smart Buying platform saw a further 58,000 vehicles advertised for sale. In the three months to March 2019, the business in whole generated GBP 3.5 million of revenue and GBP 1.8 million of profit after tax. Much of the focus, however, in 2019 remains on the platform and commercial model integration, which then provides the foundation for our disruption, where we'll offer a new lower cost and data-driven alternative to B2B buyers and sellers.
During the year, we've also continued to significantly improve our user experience, particularly in terms of the look and feel of our full-page advert view, where consumers now get a greater level of detail on the specification of the car. As you can see on the slide, we have brought the Part Exchange Guide valuation and finance quote into a more integrated journey, helping the consumer to easily understand the end transaction online, when and where it suits them. This has been one of the reasons we've seen growth in lead volumes, finance calculator interactions, and part exchange quotes mentioned earlier by Catherine. We will continue to evolve our proposition to provide more of the buying process online, which our consumers desperately want and allows retailers to reorientate their operations and cost to digital retailing.
The recent launch of our new vehicle check product is a further example of providing more of the process online, increasing trust, and providing an opportunity for retailers to reduce a significant cost in their business. Now to outlook. As with last year, we've executed our 1st of April pricing event, which has gone well. We also launched and monetized a new vehicle check proposition primarily to independent retailers, which has seen strong levels of uptake, with 80% of independent retailers opting to pay for the product. This provides strong benefits to both retailers and consumers. For our retailers, they gain access to unlimited checks on vehicles that they may be looking to source, whether that's at auction or through a possible part exchange.
This gives retailers confidence in the vehicle they are looking to purchase, knowing there are no underlying issues that could inhibit their ability to make an onward sale to consumers. In addition to this, all their vehicles on Auto Trader will appear with a full check, providing consumers with additional trust, and therefore confidence in both the retailer and the car they are looking to purchase. Within our packages, we also included this year the ability for retailers to communicate with consumers via text message, complementing our existing live chat product and ensuring we are offering the communication options most used by consumers today. The latest structure of our packages is shown in the appendix. Having made a good start to the year, here is a summary of our full year 2020 outlook. We expect another strong year of ARPA growth, which again will be underpinned by our product lever.
Albeit, the growth in product is not likely to reach the exceptional levels we saw in 2019. We expect the price lever will be broadly consistent, the stock lever is likely to be slightly down in line with market trends. We anticipate average retailer forecourts to be flat year-on-year, we have seen an improvement in consumer services, which we expect to continue. Towards the end of last year and beginning of this year, manufacturer and agency revenues have been volatile, we expect revenue from these customers to decline in the first half of this year. That being said, it does not at all detract from our belief that this remains a material long-term opportunity for our business. We anticipate total operating costs for the year to increase at a rate of low to mid-single digit.
Finally, the board is confident of meeting its growth expectations for the year. Thank you very much for joining us this morning. That now concludes the presentation, and we'll now take any questions from attendees in the room.
Hi, sir. William Packer from Exane BNP Paribas. Three from me, please. Firstly, in terms of your stock guidance, I just wanted to understand how cautious you are being there. If we look at the H2 trends, it was basically flat in terms of the ARPA. If we do the inventory tracking of the website and exclude private listings and new car, it's currently growing mid-single digits. Could you just help us understand what is behind your guidance of slight decline in stock ARPA? Secondly, in terms of the product opportunity for FY 2020, could you help us understand the potential upside and downside risks?
It sounds like vehicle check has gone well with independents. Is there a scope to upselling to franchise dealers? Retail Accelerator has slowed in H2, but you've got the big new product, so could there be an increase in adoptions there? Lastly, on the JV, two questions. Firstly, what is the organic growth of the product for the last year? Could you help us understand when the new product will be ready? Thanks.
Yeah. I'll kick it off on the stock. I think the first thing to say is we do expect it to be better than the minus 22 that we reported this year. I think the steer on the guidance. You've sort of alluded to some of the nuances that there are with live stock on site around pay as you go, private home trader, also new car. I'm sure we'll come onto a question about new car and how it's monetized, but it's unlikely to go into the stock lever specifically. The other nuance that is maybe not always immediately obvious is we do make an adjustment for yield. A lot of this growth in the second half has come from larger customers. You're not getting as much benefit there as you might assume if you're monitoring the website.
Lastly, I think our steer is still that we believe used car transactions are likely to be down, albeit only marginally. The stock guidance is really in line with that, and that's the steer for it.
I'll take the product ARPU one. I think we consistently say over the years that we'll be somewhere between 6% and 10% in terms of growth of ARPU. On a low stock year, we'll be towards the bottom of that, and a high stock year, we'll be at the top of that. I think that's why I think we sit there and look at last year, the year just gone, and go, it was pretty exceptional performance actually, particularly in the product lever. That was made up of, if you like, 50% advance and premium, about a third, maybe a little bit more in terms of dealer finance in the event that we did last April. The rest with managing, and we were trying to fight against the headwind that Jamie talked about with the Smart Buying.
As you come into the new year, we still see that advance and premium will make up around about that half. Although we expect it to be a little bit less because just penetration is higher, so each one is a bit harder every time than it was a year ago. There's no reason that we believe it should stop in the next year, so we can continue that. We know the event, vehicle check, and then the event is about the same from a percentage perspective, but we think it's going to be a little bit lower in absolute terms. The question, I guess, which is the meat of your question is, all right, well, what will the extras bring us? I think from what we know, we've still got to fight against that Smart Buying headwind.
We think with what we know, that sort of percentage of 10%, 15%, 20% with the managing and other products we've got feel okay. I think if you want to be a bull in the world, you sit there and you look at, well, okay, vehicle checks are in the independent and you can go to franchise. It is more difficult because the product has to change somewhat, and a lot of those are in 12-month contracts, so it takes some time to get into that market. That'll be a slow burn rather than a step. New car, we've got the new car opportunity, which we're not quite sure exactly when we're going to be monetizing which customers when. We've got to work through that, even though we know it's going to be a subscription product.
I think we've probably been cautious in terms of what we know in terms of those new products because we sit there and go, we just don't know it. Our tradition is we'll basically say, unless we know, we're not going to do those things. It could be better than that, and it could be the top if we do things well and execute things well, and it doesn't cannibalize that other growth in the other area. That's the bit we don't know yet. That's where we are.
On the joint venture, not to duck the question, I think the organic growth, the thing I would say to be careful is the revenues that we quote there are currently a mix of three different business models. What we are going to do, at least what we're thinking at the moment we're going to do, is move more heavily towards the transaction model, which is a portion of that revenue. That doesn't mean that we're going to walk away from subscriptions. I'd say the underlying kind of organic growth, it should be like a 15%-20% kind of growth rate just in terms of volumes. That's what I would expect ordinarily. That being said, on the other side of the new product, we'd like to see some level of acceleration or step change.
Leading up to that, there's going to be a point where we bang the commercial models together, and I'd expect that we'll probably lose some revenue there, which will be fine because I think we need to kind of pick our business model. We can't have our cake and eat it too. That's why I guess the organic growth is just be careful with it because you'd expect it to kind of drop down and then accelerate from there. In terms of what we're working to, we'll be using the technical platform that we've built. I guess the partnership was born. We're quite good at software. Cox are very good at B2B and the physical processes that sit around it. We will be moving the whole business onto our Smart Buying platform. It'll still be Dealer Auction fundamentally.
That means we need to take people that are on subscription products, people that are on transactional products, and bring them all together. We're aiming to do that early next year is kind of the target date for that. In a perfect world, we'd get off to that start 1st of January or maybe even a little bit sooner. It is software and these things tend to be a little bit uncertain. It's all going to plan, actually. We've not felt like things have happened a little quicker than what we might have expected.
Joe. The microphone's there. Sorry.
Hey, Joe Valente from Credit Suisse. Three from me, please. You spoke about some retailers moving across from Auto Trader into the core business. Can you quantify how many there were, and is there capacity for more of that going forward? Secondly, Vehicle Check , obviously, a great new product. Can you talk a little bit about the gross margin profile of that product? A lot of the incremental revenue you get from product-driven side of ARPA is incredibly high incremental margin. Can you talk a little bit about the gross margin of that product? Finally, with regard to your share of voice in the industry, the charts obviously showed that you haven't seen a huge amount of change with regard to consumer traction. With that in mind, should we assume that that 5% of revenue spent on marketing is unchanged as you look forward? Thank you.
I'll take the retailers one. It's not to quote Nathan and dodge the question, but it's hard to quantify because of the nature of pay-as-you-go. It's not as specific as having a subscription package, and we get to know the customer very well, and we're servicing those customers with our sales team. Having the analysis we have done probably says about half of the improvement in forecourts has come from that transition. I think it revolves around those improvements that we've made to the packages, both in 2019 but probably more in 2018, where we put a lot more product into our core base package. In terms of how much more that can drive, there probably is a little bit, but it's probably slow and over the course of the year.
I wouldn't say that there'd be as much or as material benefit as we've seen this year. I think we're obviously coming into the year in a strong position. That fourth quarter is a good place. I think we still believe the market for car dealers is contracting at about 1% a year, which has been pretty consistent for the last 15 years. I think that's why we're probably at flat despite coming in at that good run rate into the year. On Vehicle Check , I'd say in terms of gross margin profile, there are two broad camps of products that we do. The ones that we like best are core, advanced, premium, those sorts of things. We can build them in a very small amount of time.
You've got to think very carefully about it, but there is essentially no technology or direct cash cost that goes along with that other than the investment in resources, obviously, to roll it out. You've got another bucket of products broadly, which include things like dealer finance and vehicle check, where we need to work with a partner to deliver those. In those cases, this is all putting aside the cost of investment in the product because we expense that through the P&L, and it's just about choosing where our people focus their time. In terms of direct gross margin, vehicle check is more like a dealer finance than it is like an advanced and premium because for every check done, there is a fee that we pay, and the business model to retailers is obviously uncapped.
We've done the economics, and it looks like we've worked that out fine. It's still a high margin product, but it's not as high as something like advanced and premium. Cost of sales in our P&Ls is within the other cost line. It's not necessarily a big cost to the business. We have been spending more money in that area as we've taken other costs down, simply because we're expanding the scope of what we're getting involved with. Did you want to take the marketing question?
Sure. Audience, our performance has been robust this year, and we've maintained position. With that context, I don't think we see any reason to move away from the 5% number. That said, we're definitely not complacent, and we do remain very focused on the competition. I think we're very fortunate in that a big chunk of our traffic comes directly to us. Actually, it's internal resources and focus that drive audience growth for us as much as significant investment. The only scenario in the future I could see where we might change that is if in one of our big adjacent opportunities, we took a different view on acquiring consumers in a new area that we were looking to grow into. In terms of the core, I'm very focused on maintaining that percentage.
I'm going to go after that quick. I'll go on Andrew quickly.
Thank you.
Adam, definitely coming across to you next.
Andrew from Barclays. First one is to follow up on new cars. It sounds like you're going to monetize that with a subscription. Can you give us some help about how much you think that subscription could be worth, and a sense of how many franchise dealers might be interested in paying for it? Second one is to go back to financing. Obviously, that was a nice step up for you last year. You haven't spoken much about it in terms of incremental contribution this year or beyond. Can you talk about the opportunity to drive up ARPU in that bit of a business as you take a higher chunk of fee, referral fee on finance lead? Thanks.
You want? Yeah. I can take new or certainly the commercial aspects of it. As we said, we've sort of been working through, I think, where we've landed in terms of how we're going to commercialize it is going to be a per dealer charge rather than the cost per slot model we have on used cars. That's then dependent on the number of dealers that are subscribing to the product. We believe that all franchise dealers are selling new cars, so this should hopefully operate as an outlet for them to sell those cars. We sort of alluded to the market opportunity. We think there are about 120,000 of these cars that are out there produced in the U.K., not currently advertised to consumers, which is over 30,000, or we were at the end of the year in March.
That split, the 30 over the 120, is not way out of sync with how penetrated we are with dealers. It starts to give you a sense for where you might model it. In terms of pricing. Again, we're probably still working through a few final pieces to it. I think the reference point is, we understand there's a competitor that does GBP 300 on sale, and that's probably what we use or have used as a kind of reference price in where we're starting to derive what a monthly charge might be.
On finance, I think, there's probably two bits to the answer. The product that we've launched early last year is fundamentally an advertising product, allowing them to advertise an add-on that is very lucrative for the retailer, and actually, consumers have a great deal of interest in it. A very sensible product. Obviously, we've got to very high penetration very quickly. Pretty much anyone that was going to buy it, bought the product. There's a couple of reasons why they didn't. One, if you're charging very high APRs, you don't want to go telling the world necessarily about that. If you can't make it happen from an operational process perspective, then they haven't necessarily made that happen. We'd probably continue to see, I think that level of penetration is good, and that feels like it's relatively limited from a growth perspective.
The way to grow that product is at the moment, within monthly finance check. There's no way for a retailer that really wants to promote their finance offers over and above everyone else like we let them do in the used car model. There is no product like that within finance. We don't have any imminent plans to launch those. I'd say for this year, I don't see a great deal of upside coming from the finance side of the business. The finance advertising product, I should say. That being said, what we've discovered as we've done that first product and dug further into finance is that we think there is a very big opportunity for us to play a role in that space. You've got GBP 1 billion of commissions. We're not looking to take those from our retailers at all.
We still very much believe finance will happen at the point of sale with retailers, it is frighteningly inefficient for a retailer. People think you can save between GBP 120-GBP 170 of cost per finance application. It's very expensive for the finance providers, consumers feel like it's an opaque process, no one likes going into a car dealer having someone tell them, "Sorry, you didn't make the finance. Perhaps you need to look at your expenses." No one really wants that experience. It's a horrid experience, it doesn't need to be like that. In the medium term, I would say we should be able to play a big role in that market, that is a very big market.
We'll have to do a lot more than just advertising products, though, to unlock it, and we're looking at those kind of things now. Hopefully that'll be one of the things that we progress during the course of this year, as Trevor outlined some of the areas that we've done in the last. Right, Adam. We're going to the right side of the room.
Good morning, everyone. It's Adam Berlin from UBS. 3 questions from me. Just continuing that theme, Nathan, you mentioned that you think consumers want to transact online. I was just interested in what you've seen that makes you believe that. How you think that will work in the future, and when we might see it coming through. I think there's a really interesting opportunity. Second thing I wanted to ask you about is, although you've guided for manufacturing agency revenue to be down in the first half, are you still taking share of that market or is it just that the market's down? Third question is, operating cash flow was up 13%, the buyback was down. Why? What does that mean for the buyback in FY 2020?
Okay. Transacting online.
Yeah. I think when we talk about transacting online, from all the research that we've seen and done, I think the perception of the transaction in a consumer's mind is that the deal is done. There is no haggle to be done when they arrive at the forecourt. The research says that the vast majority of people, and it's a pretty steady number of people, want to actually physically visit somewhere away from their own place and see the vehicle before they drive it away and make the final decision. However, the bit they hate is the confusion that they feel around all the different aspects of the deal.
When we talk about transacting online, we sit there and say, "How do we take them through that so they can do the whole deal on the sofa?" That includes guaranteeing the part exchange price for their car. That includes making sure that the finance they are approved for and that they will get and to some stage signed for. Yep. Paying some sort of deposit to reserve the car and make sure that when they turn up at an appointed time, everything's ready for them to hopefully go in and 10 minutes later leave. I think the next stage of that feels like a massive yawning chasm, which is all that stuff gets done and the car magically appears on your driveway. For the majority of consumers, that feels like it's decade plus away.
For all these other bits, I think it's going to be gradual, but I think each year we'll see movement towards it. I think I'd be surprised if you're not getting to that stage in a sort of three to four-year timeframe, where a large number, not necessarily the majority by any means, but a large number of people and a meaningful number of people are doing that today. More and more of the progressive retailers are trying to move that way. What they're seeing is that, interestingly, you think to yourself, that could be a problem for retailers. Actually, what they're seeing is that if you do the thing online
The consumer is comfortable paying more for the car than they do when they come in. Actually, they get more because people just don't want to haggle, and they want to avoid the haggle, so they'll just pay what it is, and it feels like it's fair and transparent. All the extras, if you give them time, people will buy more of those extras, not less. The hard sell turns people off. Actually, what we're seeing is those people that have gone quite a long way down, they actually make more money out of the overall deal than those people who don't. I think there's something in there for the retailers that undoubtedly have to change their fundamental process model, but there's still an economic model that sits alongside that can make it successful.
Yeah. Just very quickly to add to that. If you imagine that we still only got to one forecourt visit per transaction, which is kind of what Trevor's saying, but you did most of that online, you'd be going from 1.8 average forecourt visits per transaction down to one, massive reduction. You'd be going down from a three-hour visit per visit down to 10 minutes is probably really quick. Let's say an hour. It is Trevor and his high aspirations. If you went down to an hour, all of the costs, most of the costs apart from the half a billion GBP or so spent on marketing within the value chain that eat up the gross margin of used cars of four and a half billion GBP or so, are all down to the economics of people.
The physical side of cars, most cars are stored off-site now anyway. The impact we can have on retailers, even if you get to a one visit per transaction, which is online enough, could be quite huge, and that's kind of where we're coming from. If we can get below one, that would be great, but that might take some time. Manufacturers and agencies.
The new car marketing pot. We talk about a spend bucket of about GBP 900 million spent on new car marketing in the U.K. We do see that total pot being under some pressure. You've got a backdrop of a kind of perfect storm for manufacturers with huge structural investments required in EV and all the long, bigger, longer-term trends that everyone's talking about. Macro and Brexit pressure in the short term, layered with consumer uncertainty and weak consumer confidence, with all the regulatory and emissions requirements that are also being layered on top of that. You've also got agencies, on the other hand, whose business models are structurally under quite significant pressure, and we've seen a number of switches from the big manufacturers between agencies as well, which has created further uncertainty. Overall, that spend pot, there's a huge number of moving parts within that.
In terms of our share of the segment of that that we address, I think our best estimate is that we're probably holding share of the spend that we see or that is available to us today. The big long-term opportunity for us is clearly to address and source other pockets of spend outside of the display category that we currently sit in with most of those agency and manufacturer relationships.
Excuse me. Just on the buybacks, they're only marginally down, GBP 2.7 million less. I think the important thing here is the capital allocation policy is completely unchanged, and that policy is we'll invest in the business, we will distribute roughly a third of net income as dividends. Dividends have grown. We will use surplus cash to do the majority through share buybacks and the remainder through repayment of debt. We've made an investment in the business, or more specifically, the JV, where we've paid GBP 19.7 million to Cox. That's probably the biggest driver of why that might be a decline. There's obviously no change in that policy, and that's been pretty consistent, I think since IPO, really.
We'll just take one more question. That will have to be Silvia. You're good.
Thank you, good morning. Silvia Cuneo from Deutsche Bank. Just one question. On the competitive landscape, I think you addressed the consumer perspective. I was just wondering if you have any color you could share about the dealer's perspective. Are they trying the new competitor propositions, especially after consolidation? Are dealers using more than one platform? Have you seen any changes since consolidation last year?
I'll take that one. I think the two do go hand in hand. At the end of the day, retailers are driven first and foremost, not so much by audience statistics at all. They don't really care much about them at all. What they care about is what sales get driven into their dealerships. I'd say most dealers today, because all of the classified providers are providing relatively low-cost advertising, there's a good portion of retailers, particularly the bigger ones, that will try two or three. For a large portion of our customers, a surprising percentage of our customer base, they will just use Auto Trader because it's simple, it's easy, it works. They kind of get the volume that they need. When it comes to retailers, I would say there's no retailer that sees any competitor providing anywhere close to the scale that they're getting through Auto Trader.
The numbers would suggest that the numbers are either massively wrong or they would say that. I think that they're getting used by retailers, and they always have. I would say in the past year, there is no change in that, though. The consolidation that's happened with eBay and Motors, the CarGurus and PistonHeads, I personally speak to lots and lots of retailers. I've not had anything like that really mentioned. There's been some talk of bundled packages with eBay and Motors, we've not really seen that substantiated or got any traction. I'd say it does very much reflect the consumer side. There are some good competitors. They provide a product, their product caps out at a certain level, and that's a long way away from the volumes they get through Auto Trader. Thank you very much, everyone.
Thank you.