8:00 am, June 15, 2022
Used car supermarket chain Motorpoint enjoyed a near-122 per cent rise in pre-tax profit to £21.5m over the past year – with 60 per cent of its overall sales coming from online channels and revenue topping £1bn.
In its final results for the year to March 31, 2022, which were released this morning (Jun 15) via the London Stock Exchange, the independent vehicle retailer said its profit before tax went up by 121.6 per cent from £9.7m last year.
Revenue, meanwhile, soared by 83 per cent from £721.4m to £1.322bn, and EBITDA increased by 76.5 per cent from £18.3m to £32.3m.
Operating profit was up by 98.4 per cent at £25m, while gross profit rose by 70.1 per cent to £106.3m.
Its e-commerce revenue grew by 43 per cent to £624.9m, versus £437.1m last year, with 60 per cent of overall unit volumes coming from online channels, which it said demonstrated the strength of the group’s e-commerce offering and transformation to a digitally led business.
That element of its results is particularly significant in the wake of turmoil elsewhere in the online used car world, following the collapse of Carzam and the struggles of Cazoo.
Indeed, Motorpoint now styles itself as the UK’s leading independent e-commerce-led omnichannel vehicle retailer.
In total, it sold 97,700 vehicles during the year – a 44.7 per cent rise on the 67,500 it shifted the year before. Days in stock fell from to 67 to 54.
Motorpoint opened three new sites in strategically significant regions – Manchester, Maidstone and Portsmouth – taking its total across England, Scotland and Wales to 17.
Its Motherwell preparation centre also opened last August, adding more than 20,000 units to its retail capacity and giving it a retail preparation capacity in excess of 120,000 units per annum on a single-shift basis.
Motorpoint said it also invested heavily in technology and marketing.
Grants totalling £100,000 that it received under the furlough scheme for April 2021 were repaid in full to HMRC before the end of the year.
Chief executive Mark Carpenter, pictured, said: ‘Motorpoint is a unique business with world-class capabilities and knowledge in the used car ecosystem.
‘We have always successfully adapted our business to meet every challenge and remain profitable since our inception 24 years ago.
‘We have successfully navigated unprecedented vehicle inflation and widely documented supply shortages. I am extremely pleased with the progress we have made on our medium-term strategic objectives and am convinced Motorpoint will be a winner in these rapidly evolving markets.
‘We are building a market leader with a disciplined operating culture, and we are confident in the plan we laid out a year ago.
‘Despite the ongoing uncertainty, we will continue to invest in our business with the consumer front of mind, in order to realise our long-term ambition of increased market share through price leadership, while remaining profitable.’
He added: ‘Our team continue to inspire me with their passion for our business and our customers and I’d like to thank them for building such an impressive business.
‘We have achieved significant growth and market share gains in the year. Our price leadership, strong customer service and focus on maintaining a highly engaged team will continue to substantially grow the business in the years ahead.’
Carpenter said that during the year nearly 18 per cent of the retail vehicles that it sold were sourced from consumers, including part-exchanges. That was versus 8.3 per cent the year before.
‘Our Auction4Cars.com trading platform has now been successfully upgraded to operate as an automated marketplace to include third party vendors,’ he commented.
‘This will be fully launched to further new vendors in FY23 and will enable them to auction their own vehicles digitally.
‘We are excited by the opportunity this presents and look forward to providing further details in due course.
‘Motorpoint is an agile business with growing brand awareness, low fixed costs and a compelling operating model that has always offered its customers the best value proposition in the UK used car market.
‘We have always sold cars online, first through a call centre handling online inquiries and now through a fully integrated, end-to-end digital customer journey.
‘This digital-led experience will continue to evolve in accordance with what our customers demand.
‘Fundamentally, we see this as providing a large choice of high-quality vehicles at outstanding value, and with best-in-class levels of customer service in each market we operate in.’
Darren Shirley, retail/consumer analyst at independent investment group Shore Capital, said: ‘Motorpoint’s FY22 results demonstrate tangible financial and strategic progress.
‘Strong post-Covid sales and profit recovery has been delivered, whilst a step up in investment has seen accelerating new site growth and enhanced personnel, marketing and data science capability.’
But with the UK consumer economy tightening, especially around big-ticket purchases, it lowered its pre-tax profit forecast for Motorpoint’s next financial year – reducing it by 35 per cent to £13.1m.
Brokers Liberum said: ‘There were no surprises in Motorpoint’s FY22 results. Market conditions in FY23E have continued to toughen, with supply constraints persisting and softer demand.
‘Management’s strategy is to continue to invest in the brand and the roll-out of the omnichannel proposition to build price leadership and market share.
‘While this incurs short-term pain in terms of profits, the longer-term ambitions are unchanged.’
It has cut its pre-tax profit forecast for the next financial year by 31 per cent to £14m.
