Listed used car supermarket group Motorpoint managed to INCREASE profit during the first six months of the year – despite battling the coronavirus lockdown.
Releasing its half year interim results to the Stock Market this morning, the group posted profit up 3.2 per cent to £9.7m, up from £9.4m in the same period the year before.
Revenue dropped drastically by 27.4 per cent to £387.7m from £533.9m, but Motorpoint slashed costs and enjoyed government support to maintain its margin.
And the group revealed that nearly half of its sales during the six-month period ending September 30 were carried out online.
Chief executive Mark Carpenter said demand had ‘exceeded expectations’ and margins for the group had been above recent levels too.
Carpenter said: ‘The enforced closure of all branches resulted in substantial trading losses in April and May.
‘Actions taken during the closure to preserve cash and reduce costs included suspending capital projects, reducing discretionary spending, furloughing a large proportion of our team and all of our senior team taking voluntary pay reductions.
‘The group returned to profitability in June.’
Motorpoint accelerated its free national home delivery offer and maintained sales with reserve and collect options.
Online accounted for 43 per cent of sales in the three months to the end of September – up 39 per cent.
Home deliveries were taken up by eight per cent of buyers and as a result 30 jobs have been created to help with the customer service and logistics.
Carpenter added: ‘As a result of this strong trading since reopening, the group delivered a profit before tax for the six months to September 30 ahead of the prior year.
‘This underlines the strength and agility of the Motorpoint business model, its high-quality digital offering and the group’s ability to react quickly to external challenges while maintaining its industry leading customer proposition.
‘Notwithstanding the challenging macroeconomic backdrop, we look to the future with confidence as we continue to innovate and build on the strengths of our low-cost, independent, flexible operating model and leading brand to drive further market share growth.’
Motorpoint said its 13th showroom in Swansea was performing ahead of expectations and the group is on target to open its 14th site in Stockton on Tees next month.
Carpenter said the group still planned to expand to 20 locations in the ‘medium term’ and the management team are continually ‘evaluating opportunities’.
As at the end of September the group said it had a ‘robust balance sheet’ with £13.6m in the bank, but said it would not be declaring a dividend due to the ongoing coronavirus crisis.
Looking ahead to the group’s second half of the year, it said it had been impacted by the Welsh ‘fire-break’ which saw dealers close for 17 days and the national lockdown in England.
Carpenter urged caution as he said customer confidence could be under pressure while Brexit could ‘influence future performance in unpredictable ways’.
He added: ‘Despite this, management remain confident that the group’s digitally underpinned home delivery and reserve and collect offerings will continue to service our existing customers and help us access new markets.’