8:51 am, November 23, 2023
Used car supermarket Motorpoint has confirmed sky-high losses after posting its interim results for the first half of the year.
Car Dealer reported last month that the group had made an underlying loss of £3.7m in the six months to the end of September.
That outfit has now confirmed that figure in a stark set of accounts posted via the London Stock Exchange.
The figures show that the £3.7m pre-tax loss was a 6.7 per cent dip in the same period last year, when Motorpoint raked in a £3.0m profit.
The majority of the loss (£3.1m) was suffered during a difficult Q1 with the second quarter seeing a recovery to lose just £0.6m.
The period also saw significant job losses as the used car dealer looked to ‘right-size’ its business, with redundancies costing a hefty £1m.
Revenue also fell by 22.8 per cent to £607.2m compared to £786.7m 12 months ago. Bosses say the decline was down to ‘market headwinds’.
Meanwhile, retail volumes declined by 18.4 per cent and wholesale volumes by 22.4 per cent as more stock was sourced direct from consumers and sold through retail channels.
Overall, the company sold 39,300 cars in the six month period, of which 25,800 were retail and 13,500 were wholesale.
In response to the difficult period, the group has paused new store openings, after adding its 20th store in Ipswich earlier this year.
Motorpoint has also reduced capital spend and worked hard to increase its retail margins during a tough first half of the year.
Gross margin of 6.4 per cent was slightly lower than last year’s 6.6 per cent but the time taken to prepare a vehicle improved marginally to 8.7 days, compared to 8.8 days 12 months ago.
Going forward, bosses say that ‘the rapid fall in used car values since the period end is unquestionably a near term challenge’ but are adamant that the future remains bright for Motorpoint.
‘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.’
