Interim Results
23/11/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231123:nRSW3890Ua&default-theme=true
RNS Number : 3890U Motorpoint Group plc 23 November 2023
23 November 2023
Motorpoint Group PLC
("Motorpoint" or the "Group")
Interim Results
Positioned to navigate continued market challenges, whilst building strategic
capabilities to lead in market recovery
Motorpoint Group PLC, the UK's leading independent omnichannel vehicle
retailer, today announces its unaudited interim results for the six months
ended 30 September 2023 ("H1 FY24").
H1 FY24 Financial Summary
Financial KPIs 6 months to 30 September 2023 6 months to 30 September 2022 Change 12 months to 31 March 2023
Revenue £607.2m £786.7m -22.8% £1,440.2m
Gross profit £37.7m £48.7m -22.6% £85.7m
Operating expenditure before exceptional items £(36.1)m £(42.8)m -15.7% £(79.2)m
Operating profit before exceptional items £1.6m £5.9m -72.9% £6.8m
Finance expense £(5.3)m £(2.9)m +82.8% £(7.1)m
(Loss) / Profit before taxation and exceptional items £(3.7)m £3.0m -£6.7m £(0.3)m
Exceptional items £(1.0)m nil +£1.0m nil
(Loss) / Profit for the period £(3.5)m £2.4m -£5.9m £(0.6)m
Basic (loss) / earnings per share (p) (3.9)p 2.7p -6.6p (0.7)p
Net cash £11.2m £4.5m +£6.7m £5.6m
· Revenue decreased to £607.2m (H1 FY23: £786.7m), influenced by
market headwinds. Retail volumes declined by 18.4% and wholesale volumes by
22.4% as more stock was sourced direct from consumers and sold through retail
channels
· Gross profit decline driven by lower volumes and fall in finance
commissions
· Successful right-sizing programme leading to material reductions in
the cost base, including staffing and marketing efficiencies
· Increase in finance expense reflecting significant interest rate
rises in the period
· Exceptional items relate to one-off costs to effect the right-sizing
programme
· Strong improvement in cash, despite lower profitability, which
reflects working capital management and reduced capital investment. Bank
facility undrawn at period end
H1 FY24 Operational and Strategic Highlights
Operational KPIs 6 months to 30 September 2023 6 months to 30 September 2022 Change
Market share (0-5 year old) 2.5% 2.7% -0.2ppts
Revenue £607.2m £786.7m -22.8%
Retail £509.8m £653.1m -21.9%
Wholesale £97.4m £133.6m -27.1%
E-commerce revenue £224.3m £350.6m -36.0%
Vehicles sold 39.3k 49.0k -19.8%
Retail 25.8k 31.6k -18.4%
Wholesale 13.5k 17.4k -22.4%
Days in stock 47 50 -3 days
Retail gross profit per unit £1,267 £1,373 -£106
Wholesale gross profit per unit £370 £304 +£66
Customer acquired vehicles retailed 24.2% 22.6% +1.6ppts
Customer acquisition cost per retail unit ((1)) £198 £250 -£52
Number of market locations at period end 20 19 +1
Stocking facility available at period end ((2)) £195.0m £195.0m -
(1) Total marketing cost per retail unit sold
(2) Reduced to £175.0m in October 2023
Operating margin enhancement programme
· Market challenges, including elevated interest rate environment and
reduced consumer demand, required decisive action to right-size the business
to withstand a potentially extended depressed market
· The Group prioritised improving unit metal margins, reducing
operating costs and generating cash rather than pursuing continued market
share growth
· Actions included increasing retail margins supported by the use of
data to optimise selling prices, reducing purchase 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
· Progressive reduction in headcount of 12% during H1 FY24, supported
by use of automation to drive efficiency
· Our agile sourcing model allowed us to expand vehicle age and
mileage criteria to offer lower price points to meet broader customer demand
Focused investment in digital capabilities
· Investment focused on tangible improvements to our website, enhancing
customer experience and information availability
· Record organic traffic levels and website speed improvement of
greater than 30%
· Automation benefits, including: a portal to simplify vehicle
handovers; a new open banking solution for faster payment and reduced bank
fees; simplified Auction4Cars buying and financing; and email alerts to
customers when their car of choice becomes available
Market expansion
· Opened our Ipswich store, taking the total number to 20
· Continue to review pipeline of opportunities and will be ready to
react when market conditions improve
Stakeholder excellence
· Net Promoter Score ('NPS') of 81 exceeds pre-Covid levels, and
remains industry leading
· Continued excellent progress against ESG objectives. During the
period, the business was recognised by the Financial Times as a leader in
climate change across European business sectors
Outlook
The impact of high inflation, interest rates, and consumer uncertainty
continues to affect demand for used cars.
This is impacting the value of used cars, which has fallen since the end of
the period, with a reduction in wholesale values of c.6% in just the last six
weeks. Whilst we have taken proactive measures to limit the impact on our
stock, the current environment is likely to be volatile as new car supply into
the used car market begins to increase. Our lean cost base means that we are
well placed to weather this period and the correction in values bodes well for
next year and beyond as the used car market begins to normalise.
Key elements of a normalised market are already underway, including an easing
interest rate environment, continued corrections in used car values, and an
increase in market size as demand grows and supply is bolstered by new car
registrations feeding into the used segment. Motorpoint is a leaner and more
agile business, and is ready to seize the significant growth opportunity as
market conditions improve.
Mark Carpenter, Chief Executive Officer of Motorpoint Group PLC commented:
"I have been at Motorpoint for twelve years and the agility and resilience of
our business model is something of which I am immensely proud. We have no
structural debt, a flexible business model, a fantastic team and a tremendous
opportunity ahead to achieve significant cash generation in the medium term
following the actions of the past twelve months. Our focus on improving unit
economics has been successful, although volumes remained challenging in the
period.
The rapid fall in used car values since the period end is unquestionably a
near term challenge, however it also provides reassuring signs of supply
finally beginning to improve in the nearly new market that we have dominated
in the past. I believe next year will be a key turning point for the market
and I look to the future with confidence."
Enquiries:
Motorpoint Group PLC via FTI Consulting
Mark Carpenter, Chief Executive Officer
Chris Morgan, Chief Financial Officer
FTI Consulting (Financial PR)
Alex Beagley 020 3727 1000
Harriet Jackson
Amy Goldup
Forward looking statements: The information in this release is based on
management information. This report includes statements that are forward
looking in nature. Forward looking statements involve known and unknown risks,
assumptions, uncertainties and other factors which may cause the actual
results, performance or achievements of the Group to be materially different
from any future results, performance or achievements expressed or implied by
such forward looking statements. Except as required by the Listing Rules and
applicable law, the Company undertakes no obligation to update, revise or
change any forward looking statements to reflect events or developments
occurring after the date of this report.
Notes to editors
Motorpoint is the UK's leading independent 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 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.
Non-Executive Chair's statement
Strategic Opportunity
In June 2021 Motorpoint announced a departure from its historic approach by
more aggressively embracing the role of technology and digital services in its
business and setting forth more ambitious medium term goals to at least double
its revenue to over £2bn by, among other things, growing its E-commerce
revenue to over £1bn and opening 12 new stores. Reaching these goals would
require higher levels of investment in new capabilities including technology
and automation, data and analytics, digital commerce, marketing, new sales and
service branches and its omnichannel customer proposition.
Since this announcement, in spite of the significant economic challenges
affecting the used car market and Motorpoint in particular, the Company has
progressed towards its goals by hiring key strategic leaders, developing new
technologies and digital capabilities, and refining its strategy to include
specific further capabilities that will position Motorpoint uniquely in the
market. With this progress our belief in the strategic direction and the
size of our opportunity has grown.
The use of digital services is becoming universal amongst car buyers and
sellers. This natural progression presents an opportunity for retailers to
disintermediate portions of the used car market by selling direct to consumers
through a lower cost, higher service model, by buying direct from consumers or
via new online marketplaces, and by building brand leadership and market share
through aggressive marketing. However we have learned, based on our customer
data, that some degree of physical connection continues to be preferred by
most customers to provide reassurance and trust in the transaction.
Motorpoint, as a leading omnichannel retailer, is uniquely positioned to serve
this need and is developing integrated consumer journeys across its digital,
store, customer service and delivery channels that will meet changing consumer
needs. This is Motorpoint's central strategic opportunity.
Underpinning Motorpoint's new capabilities will be contemporary technology and
data practices. These will not only create unique cross-channel customer
journeys, but will improve efficiency in our key processes such as selling,
vehicle preparation, logistics, pricing and inventory turnover.
Leading With Agility and Responsibility
With its focus on the long term strategic growth opportunity, Motorpoint has
faced very difficult markets which have challenged its near term performance
and investment capacity. In Motorpoint's 2022 financial year (FY22), the
Covid pandemic was over however supply chain shortages continued to limit the
manufacturing of new vehicles, used car prices were inflated due to
constrained supply, and consumer confidence was declining as consumers began
feeling the effects of general inflation and rising interest rates. Motorpoint
performed strongly in that year with record revenue, growth in market share
and strong operating profit. While many in the market were cautious,
Motorpoint recommitted to its ambition to lead the UK's used car market by
investing in new capabilities, digitally-driven customer experiences and new
stores.
During FY23, economic and market conditions deteriorated further, especially
in the second half. Rising inflation and interest rates, coupled with
constrained used car supply, inflated prices and a significant OEM-induced cut
in used electric vehicle values, made trading particularly challenging.
Further, high interest rates affected several components of our profit
model. High consumer finance rates reduced consumer demand and pinched unit
profitability, Motorpoint's finance commissions reduced as it tried to hold
consumer rates below market, and its finance expense on inventory borrowings
increased. In the face of these challenges Motorpoint continued to make
prudent strategic investments in order to progress towards its strategic
ambition while attempting to remain profitable and preserve cash.
Motorpoint's operating profit fell, its net profit before tax was roughly
breakeven while it managed to again grow revenues and market share.
As the company approached FY24, it believed that economic and market
conditions would not improve and indeed could worsen further with no end in
sight. Early period performance proved this out with high interest rates
accounting for c.£8m of negative profit impact in the first six months. The
Company reacted swiftly to implement a right-sizing and margin improvement
programme with an aim to preserve profitability and cash in a smaller,
persistently difficult market. It prioritised increasing unit margins,
reducing operating expenses and generating cash over revenue and market share
growth. It also tempered strategic investments and focused on efficiency,
trading effectiveness and near term returns.
I am pleased that Motorpoint has been agile and resilient through a tumultuous
period and made sound decisions based on changing market conditions. It has
also remained committed to its strategic plan in a manner that balanced its
investments responsibly. Since FY22 it has invested over £10m in new
strategic capabilities and brought substantial new technology, digital,
marketing and operational expertise into the business. Motorpoint has
positioned itself to return to profitability by year end, and progress
modestly toward building strategic capabilities, even as current poor
conditions persist. As market conditions improve Motorpoint will be in
position to accelerate its strategic plans and lead the growth of the used car
market.
I would like to thank the Motorpoint team for their extraordinary
contributions over an extended period. I look forward to a positive future
for the Company and all of our colleagues.
John Walden
Non-Executive Chair, Motorpoint PLC
23 November 2023
Chief Executive's statement
Overview
The headwinds we experienced in FY23 continued in H1 FY24, and these difficult
macroeconomic conditions therefore hampered our growth and profitability. As a
result, we took 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 these actions included increasing retail margins, supported by
improved data analysis 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 expenditure.
High interest rates and inflation continued to fuel consumer uncertainty in
the H1 period, and the market for our 0-4 year old sector fell further to
1.48m sales per annum, from a pre Covid high of 2.45m. Consequently, total
revenue fell to £607.2m (H1 FY23: £786.7m), and retail units sold to 25.8k
(H1 FY23: 31.6k). Although supply is easing, there remains a shortage of good
quality, nearly new vehicles. In addition, the high market prices and APR
rates have reduced affordability for consumers. To counteract this, we
expanded our retail criteria to cars less than five years old and 50,000 miles
towards the end of the period, to help customers find the right vehicle in
accordance with more constrained household budgets.
Reduced retail volumes, pressure on finance attachment rates due to high APRs,
and high interest expense, resulted in a drag on profitability, and the
business returned a loss before taxation and exceptional costs of £(3.7)m (H1
FY23: Profit before taxation £3.0m). As a consequence of actions taken, the
loss before taxation and exceptional items of £(3.1)m incurred in Q1 narrowed
to a small loss of £(0.6)m in Q2. Exceptional costs were £1.0m (H1 FY23:
£nil) and related to the headcount right-sizing programme.
During the period, we prioritised protecting profit and cash. Helped by use of
improved data analysis, we were able to improve unit margins and we also
increased A4C fees (but still below the market norm). We also right- sized our
headcount to reflect the lower volumes and reduced marketing costs. FTEs at 30
September 2023 were 693, significantly down from the high of almost 950 in the
early part of FY23. Marketing spend in H1 FY24 was £5.1m (H1 FY23: £7.9m),
although this reduction is likely to have impacted sales to some extent.
Despite the profitability pressures, the Group again demonstrated its
resilience to record a cash increase in the period of £5.6m, up to £11.2m.
There is significant cash headroom, with the £35m bank facility undrawn at
period end (£6m available as an uncommitted overdraft and £29m as a
revolving credit facility).
Strategy Update
We have made good progress against our strategic targets announced in June
2021. Despite the current market challenges, we remain committed to our long
term growth aspirations, whilst focusing in the short term on margin
improvement, cost base management and cash generation. The strong cash
position 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.
During H1 FY24, we continued to enhance our digital capability, and upscale
our E-commerce offering. We made improvements to the website Product Detail
Pages (PDPs) and introduced new imagery. These changes improved page views and
the time customers spend on our site. Saved search and recommendation
functionality was introduced. Email alerts are now in place to inform
customers when the vehicle they are looking for has arrived. We experienced
record levels of organic traffic, and website speed improved by over 30%,
whatever the device used.
The Group's use of data is fundamental to how we operate. As well as helping
to inform vehicle pricing decisions, it supports the identification of what
vehicles customers desire. As an example, it allowed us to identify that new
customers are more likely to buy cheaper vehicles than returning ones, and
this helped inform our decision to expand our retail criteria to five years
and 50,000 miles.
As mentioned previously, our capability was further enhanced with the
introduction of Tom Tang, who joined Motorpoint as Chief Technology Officer in
March of this year. Tom has over 20 years of experience in technology
leadership from his roles as CIO at Alliant Energy, Sainsbury's and Argos. Tom
is an advocate of the benefits of AI capabilities which benefit both the
customer and employee. Since joining, Tom has been progressing three key
fronts:
· Improving Motorpoint's customer experiences with the creation of a
Single Customer View (SCV) and integrated Customer Relationship Management
(CRM) platform;
· Automating back office functions, such as finance and procurement,
with an Enterprise Resource Planning (ERP) platform; and
· Improving delivery cadence with the creation of a near shore
technology team and using common off the shelf (open source) platforms.
By recruiting top talent and harnessing the benefits of automation we have
been able to continue to deliver operational improvements, from preparation
speed and reduced stockholding to customer self-serve technology. Automation
has also allowed us to reduce headcount and improve efficiency.
Customers
As we innovate our omnichannel customer experiences, our highly engaged team
continued to deliver our market leading proposition of Choice, Value, Service
and Quality to our loyal customers with an unerring focus on customer
satisfaction. Our NPS for sold vehicles remains high at 81. The slight fall
from the record 84 is in part explained by the disruption during the summer
caused by the redundancy exercise, but still remains at a higher level than
before Covid, and is leading for the industry.
Our Team
Our operating model of how our employees and stakeholders interact, the
Motorpoint Virtuous Circle, combined with our Values of Proud, Happy, Honest
and Supportive continue to provide a robust framework for explaining how we
get things done and what factors to consider when decisions are required.
We believe that the engagement of our team is directly correlated to our
customer satisfaction, and we sponsor multiple initiatives to enhance their
experience with Motorpoint. Our 'One Big Dream' initiative has been a huge
success, with our people using two paid hours per month for their own
fulfilment. Team retention levels improved by 11% since the start of the
calendar year.
Our One Team ethos was perfectly highlighted recently when the Derby store was
badly flooded as a result of Storm Babet. This resulted in significant
disruption for employees and customers, and required a major clean-up
operation. I am very proud of our employees from across the business (whether
it be from the office, other locations or the Derby store itself) who all
pulled together to ensure that the site was up and running again as soon as
possible, and that customers were not left disappointed.
Environmental, Social and Governance (ESG)
The Group's ESG Committee has been instrumental in setting out appropriate ESG
targets. The Group wants to be viewed as the most environmentally friendly
used car retailer and has made significant progress on its ESG strategic goals
in the period.
We are delighted that our progress was recognised by the Financial Times
naming Motorpoint as one of Europe's Climate Leaders, who are most successful
in reducing their core greenhouse gas emissions. We have championed our
commitment to energy management through internal communication channels.
We have made further reductions in energy savings; Scope 1 and 2 emissions and
business travel are down c.10% versus the previous period. Waste collection
costs are down c.14%, and less than 0.2% waste went to landfill.
We also have made further improvements to support inclusion and remove
unconscious bias, and our gender pay gap has again reduced.
Outlook
The impact of high inflation, interest rates, and consumer uncertainty
continues to affect demand for used cars.
This is impacting the value of used cars, which has fallen since the end of
the period, with a reduction in wholesale values of c.6% in just the last six
weeks. Whilst we have taken proactive measures to limit the impact on our
stock, the current environment is likely to be volatile as new car supply into
the used car market begins to increase. Our lean cost base means that we are
well placed to weather this period and the correction in values bodes well for
next year and beyond as the used car market begins to normalise.
Key elements of a normalised market are already underway, including an easing
interest rate environment, continued corrections in used car values, and an
increase in market size as demand grows and supply is bolstered by new car
registrations feeding into the used segment. Motorpoint is a leaner and more
agile business, and is ready to seize the significant growth opportunity as
market conditions improve.
Mark Carpenter
Chief Executive Officer
23 November 2023
FINANCIAL REVIEW
Group financial performance headlines
Revenue for the six months ended 30 September 2023 reduced to £607.2m (H1
FY23: £786.7m) reflecting the shrinkage of the nearly new used car market and
wider headwinds in the economic environment. Affordability has become an
increasingly big issue for consumers, and we are prioritising stock mix with
less expensive vehicles. Consequently, we have relaxed our age and mileage
criteria to ensure that we have the vehicles that customers desire and can
afford.
Gross profit was £37.7m (H1 FY23: £48.7m). Gross margin remained at 6.2% (H1
FY23: 6.2%). During the period we managed the increase to metal margin, in
part through use of data, to offset the impact of lower finance commissions.
Despite wage inflation of 6% and store openings, operating expenses before
exceptional items reduced by 15.7% to £36.1m (H1 FY23: £42.8m), reflecting a
decrease in headcount and lower marketing spend.
Loss before taxation and exceptional items was £(3.7)m (H1 FY23: PBT £3.0m).
This included the impact of higher finance costs of £5.3m, due to interest
rate rises (H1 FY23: £2.9m).
Despite the lower profitability, and as management took decisive action, net
cash improved significantly from year end. Net cash at 30 September 2023 was
£11.2m (31 March 2023: £5.6m).
Trading performance
The Group has two key revenue streams, being (i) vehicles sold to retail
customers via the Group's stores, call centre and digital channels, and (ii)
vehicles sold to wholesale customers via the Group's Auction4Cars.com website.
Retail customers Wholesale
customers Total
H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23
£m £m £m £m £m £m
Revenue 509.8 653.1 97.4 133.6 607.2 786.7
Gross profit 32.7 43.4 5.0 5.3 37.7 48.7
Retail
Revenue from retail customers was down 21.9% to £509.8m (H1 FY23: £653.1m),
with 25.8k (H1 FY23: 31.6k) vehicles sold (a fall of 18.4%). Of these, 32.8%
were sold online and we continue to see around two thirds of customers wanting
the store experience for their vehicle purchase.
Gross margin of 6.4% was slightly reduced (H1 FY23: 6.6%) following the
aforementioned headwinds, and the strengthening of metal margin offsetting the
impact of higher APRs on finance commission. We have seen a fall in attachment
rates due to the higher cost of finance.
Finance per vehicle sold decreased in the period, following this increase in
interest rates. Penetration was 49.0% in September (H1 FY23: 57.0%). Our APR
finance rates continue to be competitive despite increasing from 11.9% to
12.9% at the start of October 2023. We continue to monitor as we manage APR
rates versus commissions, and affordability for consumers.
Despite the move to older vehicles, the time taken to prepare a vehicle
improved slightly to 8.7 days (H1 FY23: 8.8 days).
Our 20th store opened in May 2023, in Ipswich.
Wholesale
Wholesale revenue via Auction4Cars.com, which sells vehicles that have been
part exchanged by retail customers, or directly purchased from consumers,
decreased by 27.1%. Circa 13.5k vehicles were sold via this purely online
platform, a reduction on H1 FY23 due to the fall in retail activity and the
relaxation of criteria, with more vehicles now being sold through the retail
platform. Gross margin improved to 5.1% (H1 FY23: 4.0%), following steps taken
by management to improve metal margin in H1 FY24, including a focus on loss
making vehicles and a review of buying fees (which remain below the competitor
set).
Operating expenses before exceptional items
Operating expenses before exceptional items decreased from £42.8m in H1 FY23
to £36.1m. Despite the new stores opened, overall full time equivalent
employees reduced to 693 from 893 as at 30 September 2022, as we focus on
efficiency in stores, preparation and head office, and right-sized our
headcount to reflect market conditions. Energy rates (for the property
portfolio at the time) were fixed for two years in September 2021, and we saw
a reduction of 10% in electric and gas usage in the period, on a per square
footage basis. Overall property costs remained broadly in line with H1 FY23 in
spite of new store openings. Marketing costs decreased from £7.9m to £5.1m
as we target a more focused approach for our marketing spend, as well as
responding to the lower consumer demand.
Exceptional items
Exceptional items of £1.0m (H1 FY23: £Nil) in the period constituted one off
restructuring costs, being redundancies incurred during the summer of 2023,
with a reduction of around 85 employees.
Interest
The Group's net financial expense was £5.3m (H1 FY23: £2.9m); the increase
reflects the rise in cost of borrowing.
Total interest charges on the stocking facilities in the period were more than
double at £3.8m (H1 FY23: £1.7m).
Interest on lease liabilities of £1.1m (H1 FY23: £1.0m) was incurred during
the period.
Interest on banking facilities was £0.4m (H1 FY23: £0.2m).
Taxation
The tax charge in the period is for the amount assessable for UK corporation
tax in the year net of prior year adjustments and deferred tax credits. The
effective rate of tax in the year of 25.0% (H1 FY23: 20.0%) is in line with
the charge which would result from the standard rate of corporation tax in the
UK of 25.0% (effective from 1 April 2023).
Shares
At 30 September 2023, 90,190,000 ordinary shares were outstanding, of which
1,671,989 were held in the Employee Benefits Trust.
Earnings per share
Basic and diluted earnings per share were both (3.9)p (H1 FY23: both 2.7p).
Dividends
No dividend was paid in the period (H1 FY23: £Nil) and the Board has not
declared an interim dividend (H1 FY23: £Nil).
Capital expenditure and disposals
Cash capital expenditure was £1.9m (H1 FY23: £5.5m) as the business
preserved cash, with additions primarily relating to the new store in Ipswich
and the ongoing IT projects.
Balance sheet
With a fall in retained earnings the net assets decreased since year end by
£3.0m to £35.9m. Working capital was proactively managed during the period,
with improvement in the net cash position.
Non-current assets were £72.0m (31 March 2023: £75.2m) made up of £12.4m of
property, plant and equipment, £55.4m right-of-use assets and intangible
assets of £4.2m (31 March 2023: £13.1m, £58.4m and £3.7m respectively).
The Group currently owns one remaining freehold plot of land in Glasgow. All
other properties are on leases of various lengths.
The Group closed the period with £143.8m of inventory, down from £148.6m at
31 March 2023. Days in stock for the period were 47 days (H1 FY23: 50 days).
At 30 September 2023 the Group had £195.0m (31 March 2023: £195.0m) of
stocking finance facilities available of which £102.3m (31 March 2023:
£102.5m) was drawn. The Group had available stocking facilities with Black
Horse Limited of £120.0m, and £75.0m with Lombard North Central PLC. After
the period end, it was agreed with Black Horse to reduce the amount available
to £100.0m, to reflect the unused portion.
The Group also has a £35.0m facility with Santander UK PLC, split between
£6.0m available as an uncommitted overdraft and £29.0m available as a
revolving credit facility. At 30 September 2023 £Nil (31 March 2023: £Nil)
was drawn on this facility.
Trade and other receivables have decreased marginally to £18.1m (31 March
2023: £18.4m).
Trade and other payables, inclusive of the stock financing facilities, have
increased slightly to £145.6m (31 March 2023: £143.8m) with the majority of
the movement being due of the timing of the VAT creditor at the period end.
The decrease in total lease liabilities to £61.7m (31 March 2023: £63.6m)
reflects the repayments made during the period.
Cash flow
Cash flow from operations was £13.1m inflow (H1 FY23: £28.9m inflow). The
lower inflow, although still strong, reflects reduced profitability and
working capital utilisation in FY23.
Other main items in the cash flow include capital expenditure of £1.9m (H1
FY23: £5.5m), principal lease repayments of £1.9m (H1 FY23: £2.7m),
interest payments of £5.3m (H1 FY23: £2.9m) and a tax receipt of £1.6m (H1
FY23: payment of £1.1m). In H1 FY23, proceeds of £9.7m were received for the
sale and leasebacks of Stockton-on-Tees and Peterborough preparation centre.
Capital structure and treasury
The Group's objective when managing working capital is to ensure adequate
working capital for all operating activities and liquidity, including
comfortable headroom to take advantage of opportunities, or to weather short
term downturns. The Group also aims to operate an efficient capital structure
to achieve its business plan.
The Group's long term funding arrangements consist primarily of the stocking
finance facilities with Black Horse Limited and Lombard North Central (to a
maximum of £175.0m) and an unsecured loan facility provided by Santander UK
PLC, split between £6.0m available as an uncommitted overdraft and £29.0m
available as a revolving credit facility. During H1 FY24, the Group maintained
its available headroom by successfully extending its terms on the facility.
Both now run until May 2026 with the option to extend for two further one year
extensions if agreed by both parties.
Chris Morgan
Chief Financial Officer
23 November 2023
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE FY24 UNAUDITED
INTERIM RESULTS
The Directors confirm that these condensed consolidated interim financial
statements have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the European Union
and that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the first
six months and their impact on the condensed consolidated interim financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
A list of current Directors and their biographies is maintained on the
Motorpoint Group PLC website www.motorpointplc.com
(https://url.avanan.click/v2/___http:/www.motorpointplc.com___.YXAxZTpzaG9yZWNhcDphOm86OGZlYTEwOWYwMWQ1M2FiOWFhYTQ1NWE5NDEyNDc0Mzk6NjoxMjQ3OjM1NWJiOWE4NzcyMjJkMTk1NGU1OWQxOWE2Nzg4MmJlNzRiNTU1OTAxYzljMjU5NDZhYTA2YzdjZTY5OTk4MWY6cDpU)
By order of the Board
Mark Carpenter
Chief Executive Officer
23 November 2023
Statement of Comprehensive Income
For the six months ended 30 September 2023
Unaudited Six Months ended 30 September 2023
Before Exceptional Items Exceptional Items Total Unaudited Six Months ended 30 September 2022 Year ended 31 March 2023
Note £m £m £m £m £m
Revenue 6 607.2 - 607.2 786.7 1,440.2
Cost of sales (569.5) - (569.5) (738.0) (1,354.5)
Gross profit 37.7 - 37.7 48.7 85.7
Operating expenses (36.1) (1.0) (37.1) (42.8) (79.2)
Other income - - - - 0.3
Operating profit / (loss) 1.6 (1.0) 0.6 5.9 6.8
Finance costs 7 (5.3) - (5.3) (2.9) (7.1)
(Loss) / Profit before taxation (3.7) (1.0) (4.7) 3.0 (0.3)
Taxation 8 0.9 0.3 1.2 (0.6) (0.3)
(Loss) / Profit for the period/year (2.8) (0.7) (3.5) 2.4 (0.6)
Other comprehensive income and expenses:
Tax relating to items which will not be reclassified to profit or loss - - - - (0.1)
Other comprehensive expense - - - - (0.1)
Total comprehensive (expense) / income for the period/year attributable to (2.8) (0.7) (3.5) 2.4 (0.7)
equity holders of the parent
Earnings per share 9 (3.9)p 2.7p (0.7)p
Basic 9 (3.9)p 2.7p (0.7)p
Diluted
The Group's activities all derive from continuing operations.
Total comprehensive expense / income for the period/year is all attributable
to the shareholders of the Company.
Condensed Consolidated Balance Sheet
As at 30 September 2023
30 September 2023 (unaudited) 30 September 2022 (unaudited) 31 March 2023
Note £m £m £m
ASSETS
Non-current assets
Property, plant and equipment 11 12.4 13.3 13.1
Right-of-use assets 12 55.4 57.8 58.4
Intangible assets 10 4.2 1.9 3.7
Deferred tax assets - 1.0 -
Total non-current assets 72.0 74.0 75.2
Current assets
Inventories 143.8 185.6 148.6
Trade and other receivables 13 18.1 19.9 18.4
Current tax receivable 0.9 - 1.3
Cash and cash equivalents 11.2 4.5 5.6
Total current assets 174.0 210.0 173.9
TOTAL ASSETS 246.0 284.0 249.1
LIABILITIES
Current liabilities
Trade and other payables, excluding contract liabilities 15 (145.6) (175.7) (143.8)
Borrowings - - -
Lease liabilities 14 (4.2) (2.7) (3.4)
Current tax liabilities - (0.1) -
Provisions 16 - (0.1) -
Total current liabilities (149.8) (178.6) (147.2)
NET CURRENT ASSETS 24.2 31.4 26.7
Non-current liabilities
Lease liabilities 14 (57.5) (60.9) (60.2)
Provisions 16 (2.6) (3.0) (2.6)
Deferred tax liabilities (0.2) - (0.2)
Total non-current liabilities (60.3) (63.9) (63.0)
TOTAL LIABILITIES (210.1) (242.5) (210.2)
NET ASSETS 35.9 41.5 38.9
EQUITY
Share capital 0.9 0.9 0.9
Capital redemption reserve 0.1 0.1 0.1
Capital reorganisation reserve (0.8) (0.8) (0.8)
Employee Benefit Trust reserve (5.3) (5.3) (5.3)
Retained earnings 41.0 46.6 44.0
TOTAL EQUITY 35.9 41.5 38.9
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2023
Six Months Ended 30 September Share capital Capital redemption reserve Capital reorganisation reserve EBT reserve Retained earnings Total equity
2023 (Unaudited)
£m £m £m £m £m £m
At 1 April 2023 0.9 0.1 (0.8) (5.3) 44.0 38.9
Loss for the period - - - - (3.5) (3.5)
Total comprehensive expense for the period - - - - (3.5) (3.5)
Transactions with
owners in their capacity
as owners:
Share-based payments - - - - 0.5 0.5
EBT share purchases and commitments - - - - - -
Share-based compensation options satisfied through EBT - - - - - -
At 30 September 2023 0.9 0.1 (0.8) (5.3) 41.0 35.9
Six Months Ended 30 September Share capital Capital redemption reserve Capital reorganisation reserve EBT reserve Retained earnings Total equity
2022 (Unaudited)
£m £m £m £m £m £m
At 1 April 2022 0.9 0.1 (0.8) (4.7) 43.9 39.4
Profit for the period - - - - 2.4 2.4
Total comprehensive income for the period - - - - 2.4 2.4
Transactions with
owners in their capacity
as owners:
Share-based payments - - - - 0.4 0.4
EBT share purchases - - - (0.7) - (0.7)
and commitments
Share-based compensation options satisfied through EBT - - - 0.1 (0.1) -
At 30 September 2022 0.9 0.1 (0.8) (5.3) 46.6 41.5
Year Ended 31 March 2023 Share capital Capital redemption reserve Capital reorganisation reserve EBT reserve Retained earnings Total equity
£m £m £m £m £m £m
At 1 April 2022 0.9 0.1 (0.8) (4.7) 43.9 39.4
Loss for the year - - - - (0.6) (0.6)
Other comprehensive expense for the year - - - - (0.1) (0.1)
Total comprehensive expense for the year - - - - (0.7) (0.7)
Transactions with
owners in their capacity
as owners:
Share-based payments - - - 0.9 0.9
EBT share purchases - - - (0.7) - (0.7)
and commitments
Share-based compensation options satisfied through the EBT - - - 0.1 (0.1) -
At 31 March 2023 0.9 0.1 (0.8) (5.3) 44.0 38.9
Condensed Consolidated Cash Flow Statement
For the six months ended 30 September 2023
Unaudited Six Months ended 30 September 2023 Unaudited Six Months ended 30 September Year ended 31 March 2023
2022
£m £m £m
(Loss) / Profit attributable to equity shareholders (3.5) 2.4 (0.6)
Adjustments for:
Taxation (credit) / charge (1.2) 0.6 0.3
Finance costs 5.3 2.9 7.1
Operating profit 0.6 5.9 6.8
Share-based payments 0.1 0.1 0.1
Depreciation and amortisation charges 5.1 4.6 9.4
Cash flow from operations before movements in working capital 5.8 10.6 16.3
Decrease in inventory 4.8 42.8 79.8
Decrease / (Increase) in trade and other receivables 0.7 (6.3) (4.8)
Increase / (Decrease) in trade and other payables 1.8 (18.2) (50.0)
Cash generated from operations 13.1 28.9 41.3
Interest paid on borrowings and financial facilities (4.2) (1.9) (5.1)
Interest paid on lease liabilities (1.1) (1.0) (2.0)
Income tax received / (paid) 1.6 (1.1) (1.1)
Net cash generated from operating activities 9.4 24.9 33.1
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets (1.9) (5.5) (9.4)
Proceeds from disposal of property, plant and equipment and right-of-use - 9.7 9.7
assets
Net cash (used in) / generated from investing activities (1.9) 4.2 0.3
Cash flows from financing activities
Payments to satisfy employee share plan obligations - (0.7) (0.7)
Repayment of leases (1.9) (2.7) (5.9)
Repayment of borrowings (19.5) (47.0) (57.0)
Proceeds from borrowings 19.5 18.0 28.0
Net cash used in financing activities (1.9) (32.4) (35.6)
Net increase / (decrease) in cash and cash equivalents 5.6 (3.3) (2.2)
Cash and cash equivalents at the beginning of the period / year 5.6 7.8 7.8
Cash and cash equivalents at end of the period / year 11.2 4.5 5.6
Net cash and cash equivalents comprises:
Cash at bank 11.2 4.5 5.6
The notes form an integral part of these Condensed Consolidated Interim
Financial Statements.
1. Basis of Preparation
Motorpoint Group Plc (the Company) is incorporated and domiciled in the United
Kingdom under the Companies Act 2006.
The Company is a public company limited by shares and is listed on the London
Stock Exchange; the address of the registered office is Champion House,
Stephensons Way, Derby, DE21 6LY. The Condensed Consolidated Interim Financial
Statements of the Company as at and for the six months ended 30 September 2023
comprise the Company, all of its subsidiaries and the Motorpoint Group Plc
Employee Benefit Trust (the 'EBT'), together referred to as the "Group". These
Interim financial statements are presented in pounds sterling because that is
the currency of the primary economic environment in which the Group operates.
The Condensed Consolidated Interim Financial Statements for the six months
ended 30 September 2023 are unaudited and the auditors have not performed a
review in accordance with ISRE 2410, Review of Interim Financial Information
Performed by the Independent Auditor of the Entity.
Going concern
The interim financial statements are prepared on a going concern basis. The
Group regularly reviews market and financial forecasts and has reviewed its
trading prospects in its key markets. Available stocking facilities remained
at £195.0m during the period, although reduced to £175.0m in October 2023 in
line with stock requirements. Arrangements relating to the unsecured loan
facility provided by Santander UK PLC (£35.0m split between £6.0m available
as an uncommitted overdraft and £29.0m available as a revolving credit
facility) were extended in June 2023 to June 2026 (previously May 2024), with
the option to extend for two further one year periods if agreed by both
parties.
The Board has reviewed the latest forecasts of the Group, including the impact
of multiple scenarios, and considered the obligations of the financing
arrangements.
For the purpose of considering going concern the Group focuses on a period of
at least 12 months from the point of signing the interim results.
The Board has considered a severe but plausible downside scenario, when
compared with the base model, in considering the going concern status of the
Group, reducing volumes and prices, and increasing interest rates and
comparing with headroom available against banking covenants and liquid
resources required to continue trading. In this case, the business would make
efforts to reduce expenditure at both current sites and consider the capital
expenditure for any new sites. This scenario demonstrates that the Group would
comply with the relevant covenants.
The Directors are aware of the impact of rising inflation, interest rates,
consumer uncertainty and worldwide vehicle supply chain challenges as
described previously, but after assessing these risks do not believe there to
be a material risk to the going concern of the Group.
Given the continued historical liquidity of the Group and sufficiency of
reserves and cash in the stressed scenarios modelled, the Board has concluded
that the Group has adequate resources to continue in operational existence
over the going concern period and into the foreseeable future thereafter.
Accordingly, they continue to adopt the going concern basis in preparing the
interim results.
2. Statement of Compliance
These Condensed Consolidated Interim Financial Statements have been prepared
in accordance with UK adopted IAS 34 Interim Financial Reporting and the
Disclosure and Transparency Rules sourcebook of the UK's Financial Conduct
Authority. The financial information included does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006 ('the
Act') and do not include all the information required for full annual
financial statements. Accordingly, they should be read in conjunction with the
Annual Report and Financial Statements of Motorpoint Group PLC for the year
ended 31 March 2023. These condensed consolidated interim financial statements
were approved by the Board of Directors on 22 November 2023.
3. Significant Accounting Policies
The same accounting policies, presentation and methods of computation which
were followed in the preparation of the Annual Report and Financial Statements
for Motorpoint Group PLC for the period ended 31 March 2023 have been applied
to these Condensed Consolidated Interim Financial Statements where applicable.
The accounting policies and details of new standards adopted in the year ended
31 March 2023 are listed in the Motorpoint Group PLC Annual Report and
Financial Statements on pages 126-134.
4. Comparative Figures
The comparative figures for the financial year ended 31 March 2023 are
extracted from the Motorpoint Group PLC Annual Report and Financial Statements
for that financial year. The accounts have been reported on by the Company's
auditor and delivered to the Registrar of Companies. The report of the auditor
was (i) unqualified (ii) did not include a reference to any matters to which
the auditor drew attention by way of emphasis without qualifying their report
and (iii) did not contain a statement under section 498(2) or (3) of the Act.
5. Segmental Reporting
The Group has prepared segmental reporting in accordance with IFRS 8
'Operating Segments'. The Group's chief operating decision maker is considered
to be the Board of Directors. Segmental information is presented on the same
basis as the management reporting. An operating segment is a component of the
business where discrete financial information is available and the operating
results are regularly reviewed by the Group's chief operating decision maker
to make decisions about resources to be allocated to the segment and to assess
its performance.
Operating segments are aggregated into reporting segments to combine those
with similar characteristics.
The Group operates its omnichannel vehicle retailer offering through a store
network and separate financial information is prepared for these individual
store operations. These stores are considered separate 'cash generating units'
for impairment purposes. However, it is considered that the nature of the
operations and products is similar and they all have similar long term
economic characteristics and the Group has applied the aggregation criteria of
IFRS 8. In addition, the Group operates an independent trade car auction site
offering a business to business entirely online auction market place platform
which is assessed by the Board as a separate operation and thus there are two
reportable segments: retail and wholesale.
Retail Retail Wholesale Wholesale Total Total
30 September 2023 30 September 2022 30 September 2023 30 September 2022 30 September 2023 30 September 2022
£m £m £m £m £m £m
Revenue 509.8 653.1 97.4 133.6 607.2 786.7
Cost of sales (477.1) (609.7) (92.4) (128.3) (569.5) (738.0)
Gross profit 32.7 43.4 5.0 5.3 37.7 48.7
6. Revenue
Revenue represents amounts chargeable, net of value added tax, in respect of
the sale of goods and services to customers. Revenue is measured at the fair
value of the consideration receivable, when it can be reliably measured, and
the specified recognition criteria for the sales type has been met. The
transaction price is determined based on periodically reviewed prices and are
separately identified on the customer's invoice. There are no estimates of
variable consideration.
The transaction price for motor vehicles and motor related services is at fair
value as if each of those products are sold individually.
(i) Sales of motor vehicles
Revenue from the sale of retail motor vehicles is recognised when the control
has passed; that is, when the vehicle has been collected by, or delivered to,
the customer. Payment of the transaction price is due immediately when the
customer purchases the vehicle. Sales of accessories, such as mats, are
recognised in the same way.
Revenue from the sale of wholesale vehicles is recognised when the control has
passed; that is, when full payment has been made for the vehicle.
The Group operates a return policy which is consistent with the relevant
consumer protection regulations. This is offered in the form of a seven day
exchange guarantee to all retail customers and a 14 day money back guarantee
for home delivery customers.
(ii) Sales of motor related services and commissions
Motor related services sales include commissions on finance introductions,
extended guarantees and vehicle asset protection as well as the sale of paint
protection products. Sales of paint protection products are recognised when
the control has passed; that is, the protection has been applied and the
product is supplied to the customer.
Vehicle extended guarantees where the Group is contractually responsible for
future claims are accounted for by deferring the guarantee income received
along with direct selling costs, and then releasing the income on a straight
line basis over the remaining life of the guarantee. Costs in relation to
servicing the extended guarantee income are expensed to the statement of
comprehensive income as incurred. The Group has not sold any of these policies
in the current or prior period but continues to release income in relation to
legacy sales.
Vehicle extended guarantees and asset protection ('GAP insurance') where the
Group is not contractually responsible for future claims, are accounted for by
recognising the commissions attributable to Motorpoint at the point of sale to
the customer.
Where the Group receives finance commission income, primarily arising when the
customer uses third party finance to purchase the vehicle, the Group
recognises such income on an 'as earned' basis.
The assessment is based on whether the Group controls the specific goods and
services before transferring them to the end customer, rather than whether it
has exposure to significant risks and rewards associated with the sale of
goods or services.
The Group receives commissions when it arranges finance, insurance packages,
extended warranty and paint protection for its customers, acting as agent on
behalf of a limited number of finance, insurance and other companies. For
finance and insurance packages, commission is earned and recognised as revenue
when the customer draws down the finance or commences the insurance policy
from the supplier which coincides with the delivery of the product or service.
Commissions receivable for all motor related services are paid typically in
the month after the finance is drawn down. For extended warranty and paint
protection, the commission earned by the Group as an agent is recognised as
revenue at the point of sale on behalf of the Principal.
Six Months Six Months Year
ended 30 ended 30 ended 31
September September March
2023 2022 2023
£m £m £m
Revenue from sale of motor vehicles 578.1 745.3 1,370.7
Revenue from motor related services and commissions 25.9 34.5 62.6
Revenue recognised that was included in deferred income at the beginning of 0.2 3.9 3.9
the period - Sale of motor vehicles
Revenue recognised that was included in deferred income at the beginning of 3.0 3.0 3.0
the period - Motor related services and commissions
Total Revenue 607.2 786.7 1,440.2
7. Finance costs
Six Months ended Six Months ended Year ended
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Interest on bank borrowings 0.4 0.2 0.4
Interest on stocking finance facilities 3.8 1.7 4.7
Other interest payable 1.1 1.0 2.0
Total finance costs 5.3 2.9 7.1
8. Taxation
The tax charge for the period is provided at the effective rate of 25.0% (H1
FY23: 20.0%) representing the best estimate of the average annual tax rate for
the full year profit.
9. Earnings per Share
Basic and diluted earnings per share are calculated by dividing the earnings
attributable to equity shareholders by the weighted average number of ordinary
shares at the end of the period.
No dilution in H1 FY24 due to the Group making a loss before taxation.
Six Months Six Months Year
ended 30 ended 30 ended 31
September September March
2023 2022 2023
(Loss) / Profit Attributable to Ordinary Shareholders (£m) (3.5) 2.4 (0.6)
Weighted average number of ordinary shares in Issue ('000) 90,190 90,190 90,190
Basic Earnings per share (pence) (3.9) 2.7 (0.7)
Diluted Number of Shares in Issue ('000) 90,190 90,207 90,190
Diluted Earnings per share (pence) (3.9) 2.7 (0.7)
The difference between the basic and diluted weighted average number of shares
represents the dilutive effect of the various Group share plans. This is shown
in the reconciliation below.
Six Months Six Months Year
ended 30 ended 30 ended 31
September September March
2023 2022 2023
Weighted average number of ordinary shares in Issue ('000) 90,190 90,190 90,190
Adjustment for share options ('000) - 17 -
Weighted average number of ordinary shares for diluted earnings per share 90,190 90,207 90,190
('000)
10. Intangible assets
WIP IT projects Total
£m £m £m
At 1 April 2023 0.6 3.1 3.7
Additions - 1.0 1.0
Transfers (0.3) 0.3 -
Amortisation - (0.5) (0.5)
At 30 September 2023 0.3 3.9 4.2
11. Property, plant and equipment
WIP Land Short term leasehold improvement Plant and machinery Fixtures and fittings Office equipment Total
£m £m £m £m £m £m £m
At 1 April 2023
Cost 0.5 2.4 14.2 2.4 3.6 4.8 27.9
Accumulated depreciation - - (7.6) (1.6) (1.9) (3.7) (14.8)
Net book value 0.5 2.4 6.6 0.8 1.7 1.1 13.1
Opening net book value 0.5 2.4 6.6 0.8 1.7 1.1 13.1
Additions - - 0.6 - 0.1 0.2 0.9
Transfers (0.3) - 0.2 0.1 - - -
Depreciation - - (0.9) (0.2) (0.2) (0.3) (1.6)
Closing net book value 0.2 2.4 6.5 0.7 1.6 1.0 12.4
At 30 September 2023
Cost 0.2 2.4 15.0 2.5 3.7 5.0 28.8
Accumulated depreciation - - (8.5) (1.8) (2.1) (4.0) (16.4)
Net book value 0.2 2.4 6.5 0.7 1.6 1.0 12.4
12. Right-of-use assets
30 September 30 September 31 March
2023 2022 2023
Right-of-use assets £m £m £m
Balance brought forward 58.4 46.7 46.7
Additions - 14.1 17.4
Depreciation charge (3.0) (3.0) (5.7)
55.4 57.8 58.4
13. Trade and other receivables
30 September 30 September 31 March
2023 2022 2023
Due within one year £m £m £m
Trade receivables 9.6 16.0 9.9
Prepayments 2.1 3.9 3.9
Accrued income 6.4 - 4.6
18.1 19.9 18.4
The Directors' assessment is that the fair value of trade and other
receivables is equal to the carrying value. Accrued income relates to
commissions earned from finance companies.
14. Lease liabilities
30 September 30 September 31 March
2023 2022 2023
Lease liabilities £m £m £m
Balance brought forward 63.6 52.8 52.8
Additions to lease liabilities - 13.5 16.7
Repayment of lease liabilities (including interest element) (3.0) (3.7) (7.9)
Interest expense related to lease liabilities 1.1 1.0 2.0
61.7 63.6 63.6
Current 4.2 2.7 3.4
Non-current 57.5 60.9 60.2
61.7 63.6 63.6
15. Trade and other payables
Due less than 1 year
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Trade payables
- Trade creditors 20.8 27.5 18.6
- Stocking finance facilities 102.3 124.6 102.5
Other taxes and social security
- VAT payable 4.3 1.1 0.7
- PAYE/NI payable 0.7 1.0 0.9
Other creditors 1.5 0.1 0.3
Accruals and deferred income 16.0 21.4 20.8
145.6 175.7 143.8
The Directors' assessment is that the fair value of trade and other payables
is equal to the carrying value.
16. Provisions
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Make good provision(1) 2.5 3.0 2.5
Onerous leases(2) 0.1 0.1 0.1
2.6 3.1 2.6
Current - 0.1 -
Non-current 2.6 3.0 2.6
2.6 3.1 2.6
(1) Make good provision
The Group may be required to restore the leased premises of its retail stores
to their original condition at the end of the respective lease terms. A
provision has been recognised for the present value of the estimated
expenditure required to remove any leasehold improvements. These costs have
been capitalised as part of the cost of right-of-use assets and are amortised
over the shorter of the term of the lease and the useful life of the assets.
The timing of the cash outflow relating to the make good provision is in line
with the life of the relevant lease. The remaining term on existing leases
ranges from 2 to 16 years with a weighted average of 10 years.
There is judgement associated with the potential cost of remediation of each
property and estimated provisions have been based on the past experience of
the Group.
(2) Onerous leases
The Group operates across a number of locations and if there is clear
indication that a property will no longer be used for its intended operation,
a provision may be required based on an estimate of potential liabilities for
periods of lease where the property will not be used at the end of the
reporting period, to unwind over the remaining term of the lease. The onerous
lease is likely to be utilised for a period of 3 years.
17. Post balance sheet events
On 2October 2023, a significant amount of damage was caused to inventory and
the fixed assets within the Derby store because of flooding in the area.
Assessments for the full value of the damage are still being carried out at
the day of signing. However, the Group expects that this will be covered
through the insurance policies held.
Given the significant headroom on the stocking facility with Black Horse
Limited, it was agreed to reduce this by £20.0m to £100.0m in October 2023.
The equivalent facility with Lombard North Central of £75.0m remains at the
same level.
Alternative performance measures "APMs"
Return on capital employed (ROCE)
30 September 2023 30 September 2022 31 March 2023
Operating profit before exceptional items for the last 12 months (£m) 2.5 6.8
15.8
Average net assets (£m) 38.7 39.2 39.2
ROCE 6.5% 40.3% 17.3%
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR KLLFLXFLBFBF