5th Apr 2019 09:30
LONDON (Alliance News) - Motorpoint Group PLC on Friday said it expects to record growth in revenue and underlying pretax profit for 2019 financial year despite a slower second half.
Shares in Mototorpoint were down 6.5% at 177.58 pence on Friday morning.
The UK vehicle retailer intends to report annual revenue growth of more than 6% for the year ended March 31. Growth was weakest in Motorpoint's second half but it does expect to see its market share increase in its current financial year ended 2020.
The company said it will post an underlying pretax profit increase of approximately 10% for its 2019 financial year.
Motorpoint's gross margins per unit were slightly softer in financial 2019 due to "strong vehicle supply availability in the market". However, the company was confident this availability had given Motorpoint a "broad and competitive stock offering" at the start of its current year.
Given that its operating cash conversion was strong in financial 2019, Motorpoint has maintained its commitment to its ongoing share buyback programme.
Motorpoint Chief Executive Mark Carpenter said: "The group experienced a slower second half but I am pleased that we have achieved double-digit profit growth for the full year and executed strong cost disciplines. Our resilient model is demonstrated through a gross profit to overheads ratio of 144% and a robust closing balance sheet which is again absent of any structural debt."
"The agility of the group's business model enables management to react swiftly to the evolving political and economic situation and the board believes that the group is well placed to continue building on its compelling customer proposition."
In terms of outlook, Motorpoint expressed caution due to the "continued volatile political environment and consumer uncertainty" and anticipates an approximately GBP2 million non-cash profit headwind in its 2020 financial year compared to financial 2019.
Nonetheless, revenue and underlying profit are expected to continue to grow in financial 2020. The company has exchanged contracts on what is expected to be is 13 retail site once it opens in the second half of the 2019 calendar year.
Motorpoint will report its preliminary results for its 2019 financial year on June 11.
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