VEHICLE retailer Motorpoint today posted a drop in pre-tax profit of nearly a fifth for the first half of its financial year, despite a rise in revenue.
In its unaudited interim results, the group, which has 12 sites across the UK, said it made £9.4m in the six months to September 30 – down from £11.5m for the corresponding period last year. Revenue, meanwhile, rose by one per cent from £528.6m to £533.9m.
It pointed the finger of blame for the fall at increased overheads as well as continuing market upheaval and the political situation causing muted consumer confidence.
Despite the profit fall, though, Motorpoint is set to open a 13th site in January in Swansea and is scouting out more to add to its portfolio.
Chief executive Mark Carpenter, pictured, said: ‘Against a challenging environment, the group has delivered a resilient trading performance, underpinned by revenue growth and robust cash generation.
‘Group profit was impacted by increased overheads, which were approximately £2m higher than the comparable period last year. Half of this increase will be non-recurring following process changes implemented in the period.
‘The first half of the year has seen significant growth in our market share despite ongoing market disruption, with the political situation leading to another period of lacklustre consumer confidence. Specifically, within the used car market, the early summer months was also a period of unusually high pressure on margins.
‘We have seen significant success in improving our processes around the preparation of our vehicles, including through the recruitment of a new chief operating officer [Andy Smyth] and the opening of our dedicated 10-acre preparation facility in Peterborough. This has already driven down our stock days further, releasing working capital back into cashflow.
‘Opening plans for our next site, in Swansea, are well progressed and we anticipate launching this new five-acre site in our financial Q4. We are in advanced discussions on several further sites and expect to be able to provide an update in the coming months.
‘Current trading is consistent with achieving management’s full-year expectations, albeit with a greater weighting towards H2. However, potential outcomes from the government’s Brexit negotiations could influence our future performance in unpredictable ways.
‘We believe our unrivalled choice of nearly new vehicles and ongoing dedication to choice, value and service positions us strongly to take advantage of any market disruption, as has been evidenced in the period by our growing market share.’