6th Oct 2022 11:16
(Alliance News) - Motorpoint Group PLC on Thursday said in its half year trading update that macroeconomic factors continue to stall progress as it struggles with substantial profit losses.
For the first half ended September 30, the Derby-based omnichannel vehicle retailer expects pretax profit of around GBP3 million, a significant decrease from GBP13.5 million a year prior.
Motorpoint said that this decline reflected additional costs, including an increased strategic investment of around GBP4 million, and interest costs of around GBP1.0 million. It also said numbers for the first half suffered in comparison to the "record margins" of last year.
This was despite higher revenue of around GBP785 million, up 30% year-on-year from GBP605.2 million, which was attributed to vehicle mix and price inflation.
Looking forward, the business said rising inflation, interest rates, and worldwide vehicle supply chain challenges would continue to present roadblocks for the used car market.
While it remains cautious in the short term, Motorpoint said that it will continue to invest for the long term "in a weakening competitor landscape" by prioritising customers and opening new locations.
Its 19th location is due to be opened in Coventry at the end of October 2022.
At period end, the group had a net cash position of around GBP4.5 million, down 42% from GBP7.8 million on March 31, 2022. It expects stocking finance headroom of around GBP70 million, and has stocking facilities of GBP195 million.
Motorpoint shares were trading 16% lower at 149.55 pence each in London on Thursday morning.
By Holly Beveridge; [email protected]
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