The lockdown in April and May cost used car supermarket Motorpoint £3.4m – but the impact was lessened by government support.
In a trading update to the Stock Market this morning, the dealer group – which operates 13 sites around the UK – said the shut down was offset thanks to £3.8m of government hand outs.
The group furloughed a ‘large proportion’ of its staff, senior management took voluntary pay reductions and spending was slashed.
However, the dealer group – like many other motor trade businesses – has rapidly bounced back to profit in June.
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Mark Carpenter, CEO of Motorpoint, said: ‘The group has emerged from lockdown in great shape and this is testament to the team and their agility and adaptability in these ever-changing times.
‘Our Home Delivery and Click & Collect offerings continue to gather momentum and I look forward to opening our 14th retail site, in Stockton on Tees, at the end of 2020.
‘As a result of the group’s performance in the three months since our sites reopened, and notwithstanding the potential of future regional or nationwide lockdowns, the board continues to look to the future with confidence.’
The group’s share price has risen from a low of 180p in April to 310p today.
The recovery has been so rapid the group is now predicting that profit before tax for the period up to the end of September will be ahead of last year.
It also revealed that online purchases now accounted for 36 per cent of the group’s sales.
Looking to the future, the report says Motorpoint will grow its online sales and home delivery options further and access new markets with new sites.
Currently eight per cent of customers opt for home delivery – up from zero six months ago. This increase has also led to 30 new jobs at Motorpoint.
The group added that it is managing to maintain ‘good levels of supply’ – impressive with used car demand so high – and margins are being ‘maintained’.
However, with Covid-19 cases rises, the group offers no outlook for the future – and admits that in areas where lockdown restrictions have been in place demand has suffered.
The report adds: ‘Government restrictions will subdue demand in the short term as consumer confidence is negatively impacted, as we have seen in certain of our sites affected by local lockdown restrictions.
‘Given such uncertainty on future demand levels, the board believes it prudent to continue to refrain from offering guidance at the current time.’
The update added that it has a ‘robust’ balance sheet with no structural debt and net cash of £13m at the end of September.
The group will offer ‘further guidance’ when it releases its half year results on November 26.