AGM Trading Update
26/07/2023 07:00
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RNS Number : 1614H Motorpoint Group plc 26 July 2023
26 July 2023
Motorpoint Group PLC
("Motorpoint" or the "Group")
AGM Trading Update
Motorpoint Group PLC, the UK's leading independent omnichannel used vehicle
retailer, is pleased to announce that John Walden, Chair of Motorpoint, will
make the following statement at the Company's Annual General Meeting, to be
held at 10:00am BST today, which is an update on trading for the first quarter
(Q1) of the financial year ending 31 March 2024:
As highlighted in our recent Final Results on 14 June 2023, the UK's difficult
macroeconomic conditions hampered our growth and profitability during the
second half of FY23. In the face of these challenges, we reinforced our
commitment to our long term growth ambitions but noted that, in the short
term, we intended to focus on increasing margins and reducing our cost base
which in turn should improve cash generation and profits, and provide an
opportunity for selective strategic investment.
As expected, these difficult macroeconomic conditions continued into Q1.
However, the Group had a net cash position of £2.2m at 30 June 2023 (with
further facility headroom of £35m available) driven by our continued focus on
working capital management and reduced capital spend. We took decisive
action to lower the required breakeven volume of the Group to a level which
maintains cash generative trading. Trading performance improved throughout Q1
and we expect this trend to continue in Q2 reflecting further improvements in
margin and cost base reductions.
The action undertaken in Q1 has included:
· Improved retail margins supported by increased use of data to
optimise selling prices, without compromising on our industry leading price
leadership.
· Securing a greater proportion of stock through direct supply channels
rather than auction as supply begins to open up, reducing auction fees.
· Streamlining our organisational structure, which will result in a
headcount reduction of c.10%, delivering annualised savings of c.£3m. This
is in addition to savings already made in the second half of FY23.
· Pausing new store roll out and reducing discretionary capital spend.
Outlook
As previously communicated, the impacts of high inflation, rising interest
rates, and consumer uncertainty continue to affect demand for used cars.
However, like others in the industry, we are encouraged by the growing number
of vehicle supply options which, coupled with our increased use of data to
determine optimum selling prices, has resulted in an improvement in retail
margin. This will, in part, be tempered by lower finance commission as
consumer uptake for finance reduces due to increased APR rates. The Group
has also focused on the costs of the business to ensure they are aligned with
current market activity and, utilising the investment in technology to date,
we are able to maintain a lower headcount as we conserve cash and return to
profitability, whilst ensuring we are ready to invest for growth as more
favourable market conditions return. The Group continues to be confident it
will emerge in a normalised market as a leaner and more valuable business
ready to seize a significant opportunity.
Enquiries:
Motorpoint Group PLC via FTI Consulting
Mark Carpenter, Chief Executive Officer
Chris Morgan, Chief Financial Officer
FTI Consulting (Financial PR) 020 3727 1000
Alex Beagley
Sam Macpherson
Harriet Jackson
Amy Goldup
Notes to editors
Motorpoint is the UK's leading independent E-commerce led omnichannel vehicle
retailer, focused on giving retail and trade customers the easiest, most
affordable and seamless way of buying, selling and financing their car whether
online, in store or a combination of both. Through its leading B2C platform
Motorpoint.co.uk and UK network of 20 sales and collection stores, the Group
provides an unrivalled offering in the nearly new car market, where consumers
can effortlessly browse, buy or finance their next car and collect or have it
delivered directly to their homes. Motorpoint's purely online wholesale
platform Auction4Cars.com sells vehicles into the wholesale B2B market that
have been part exchanged by retail customers, or purchased directly from them
by the Group as part of its online car buying service. Motorpoint's
diversified business model, underpinned by its established brand, industry
leading technology and sophisticated marketing infrastructure, always delivers
the best choice, value, service and quality for customers. The Group is proud
to have been recognised for nine consecutive years as one of the Top 100 Best
Companies to Work For.
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