Half Year Trading Update
05/10/2023 07:00
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RNS Number : 7356O Motorpoint Group plc 05 October 2023
5 October 2023
Motorpoint Group PLC
("Motorpoint" or the "Group")
Half Year Trading Update
Stronger quarter-on-quarter performance resulting from cost reductions and
operational improvements
Motorpoint Group PLC, the UK's leading independent omnichannel vehicle
retailer, provides an update on its trading performance for the six months
ended 30 September 2023 ("H1 FY24").
In our trading update on 26 July 2023, we reiterated that the UK's difficult
macroeconomic conditions continued to hamper our growth and profitability. As
a result, in Q1, we took swift, decisive action to right-size the business to
reflect the reduced market size and ensure cash generative trading at lower
levels of group sales. Some of our actions included increasing retail
margins supported by the use of data to optimise selling prices, reducing
auction fees by securing a greater proportion of stock through direct supply
channels, streamlining our organisational structure, pausing new store roll
out and reducing discretionary capital spend. Our right-sizing programme
proved helpful to our performance in Q2 as these difficult macro conditions
continued.
As we have previously communicated, the affordability of used vehicles has
been adversely affected by high prices and increasing APR finance rates,
against the backdrop of continued consumer uncertainty. In response, we have
recently taken further action by broadening our selling criteria to include
vehicles up to five years old and 50,000 miles, to help our customers find the
right vehicle in accordance with more constrained household budgets. We
anticipate used values will gradually align to historic levels as new car
supply continues to improve which will further enhance affordability for our
customers.
As a consequence of the margin improvement and cost base actions we
highlighted in July 2023, the underlying loss before taxation of £3.1m
incurred in Q1 narrowed to a small loss of c.£0.6m in Q2. For the half year,
the business made an underlying operating profit of c.£1.6m before interest
expense of £5.3m. We also incurred a one-off exceptional charge of c.£1.0m
which related to redundancy costs.
Despite the current market challenges, we remain committed to our long term
growth aspirations, while focusing in the short term on margin improvement,
cost base management, and cash generation. The Group generated net cash from
operations in H1 FY24 and ended the period with net cash of £11.0m (30 June
2023: £2.2m) with further facility headroom of £35m available, demonstrating
the resilience of the business in difficult markets.
The strong cash position of the Group allowed us to continue making targeted
strategic investment, with further improvements in technology involving both
our retail and wholesale businesses, and we opened our 20(th) store, in
Ipswich, in May 2023. Our market share of the 0-4 year old market increased to
3.4% for the 12 months to June 2023 (previous 12 months 3.2%).
The Group expects to announce its Interim Results on 23 November 2023.
Mark Carpenter, CEO of Motorpoint, said:
"The impacts of high inflation, interest rates, and consumer uncertainty
continue to affect demand for used cars. We have responded by reducing our
cost base and expanding our retail criteria to help customers find the car of
their choice at a price they can afford. We have successfully preserved cash
while making progress on selective strategic initiatives, and are well
positioned to emerge from this difficult macroeconomic cycle a leaner and more
agile business, ready to seize the significant opportunity as market
conditions improve."
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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