Used car supermarket chain Motorpoint reported this morning that it enjoyed record sales in the first two months of this financial year.
It said chairman Mark Morris would be telling its behind-closed-doors annual meeting at 10am today (Jul 27) about the company’s success in a trading update for the first quarter of the financial year ending on March 31, 2022.
No figures were given, but according to the update the record sales were made both online and in branches, and were ‘significantly ahead’ versus the 2019/20 financial year, which it said was a more meaningful comparison than the financial year just gone.
It follows June’s announcement of its full-year results in which it revealed that revenue for the group was down 29.1 per cent during the Covid-hit year to £721.4m and gross profit fell from £78.9m to £62.5m.
Profit before tax for the group in the year was nearly halved to £9.7m (from £18.8m). EBITDA – the figure used to calculate our Car Dealer Top 100 list – was £18.3m.
In today’s trading update, issued via the London Stock Exchange, Motorpoint said: ‘A reduced supply of vehicles, driven by the fall in new car production, had contributed to a moderation of revenues during June, and into July.
‘However, throughout the first quarter, gross profit margins remained strong due to appreciation of vehicle values, and trading is in line with the board’s expectations for the full year.’
It said 61 per cent of vehicles had been sold online in this first quarter, while volumes on its wholly online wholesale platform Auction4Cars.com ‘were significantly ahead of FY20, with record margins’.
Motorpoint said it had continued spending more on technology and marketing, adding that its car-buying service, which sees it buying vehicles straight from consumers, had been launched successfully on July 6.
It stated that this would ‘be an important enabler to increase the supply of retail vehicles and the volume of transactions on Auction4Cars.com’.
The group also intends to speed up its expansion into fresh markets, saying new branches will open in Manchester in the autumn and Maidstone later this year.
Several more branches are said to be under negotiation and expected to be bought during 2021.
The update concludes by saying: ‘It is important to note that some uncertainty persists given the well-documented vehicle supply shortage, the potential continued disruption from Covid-19, and a realignment of used vehicle margins.
‘However, progress on the group’s strategic goals means it is well placed to deal with any potential headwinds and the board continues to look to the future with confidence, as the group continues its exciting transformation into an e-commerce-led business with huge potential.’