The conundrum for investors is whether Auto Trader can keep growing

Auto Trader, the online car marketplace, has been able to grow profits at a faster pace than sales for the past two years. It has grown into one of the most profitable businesses listed in London, with margins in its core business north of 70 per cent. It is little wonder that the FTSE 100 company is priced so highly by investors. The quality of its business model is certainly not in doubt — so the real question is, can it keep growing?

The company, which was born out of a trade magazine from the 1970s, is the largest online car marketplace. About 80 per cent of its sales come from car retailers, which include franchised dealerships, car supermarkets and independent sellers, by charging them