1 week ago
Motorpoint is back on the road of profitability after it finished the past six months in the black and grew retail volumes.
The used car supermarket filed its H1 2025 interims on the London Stock Exchange this morning (Nov 27), with bosses hailing its turn-around ‘Brilliant Basics’ plan ‘delivered what it needed to’.
In the six-month period ended September 30, 2024, the listed firm made a pre-tax profit of £2m – a huge bounce-back from the £4.7m loss it made in the same period last year.
While revenue fell by £44.1m to £563.1m, gross profit jumped by £7m to £44.7m.
Motorpoint said the decrease in revenue reflected ‘more affordable vehicle mix and price deflation’, particularly in the second half of 2023, while the rise in gross profit was thanks to ‘greater use of data-led pricing and improved stock management’.
During the period, the used car supermarket group sold 43,300 cars – up 10.2% on the same timescale last year, and comprised 30,300 retail and 13,000 wholesale.
Market share of the zero-to-six-year-old market rose by 50 basis points from 2.0% to 2.5%, with Motorpoint declaring this as a ‘return to market share outperformance’.
Days in stock fell from 47 to 41 days, while retail profit per unit rose by £50 to £1,317. Gross profit margin grew by 170 basis points to 7.9%.
Customer acquisition cost – which is the total marketing cost per retail unit sold – fell by £51 to £147, while Motorpoint grew its online side of its business. Orders from digital leads rose 16% to 13,700 units, and website session jumped 24% to 8.15m.
The earlier £5m buyback share programme – which led to 3.6m shares being bought – has firmed up Motorpoint’s cash position, with a bank facility of £20m remaining undrawn at the end of the September.
As previously reported, a new Motorpoint store will open in Norwich in December and become the firm’s 21st store. Its first site, Derby, will also receive a ‘significant investment’ to be relaunched and extended.
Also in the six-month interim report, Motorpoint gave comment on the recent finance commission changes following the groundbreaking Court of Appeal judgement on October 25.
Between October 29 and November 4, the business sold a 7.9% APR product but received no commission. However, from November 8, it had returned to a 10.9% APR product (as it was offering before October 25) and pre-existing commission but with enhanced disclosure to customers.
The temporary pause in commissions and the selling of a lower APR product is not expected to have ‘material impact’ on Motorpoint’s full-year profit expectations.
Commenting on the six-month interim report, CEO Mark Carpenter said: ‘I am pleased with our solid performance in the first half of FY25, which was marked by a return to profitability following several years of considerable headwinds that have impacted our industry.
‘Brilliant Basics, our right sizing and margin improvement programme, delivered what it needed to in FY24, ensuring foundations for future growth. As well as strong year on year volume growth and market outperformance, margins strengthened, and stock turn improved to an industry-leading 41 days in stock.
‘Following the challenges faced in recent times, we remain cautious as supply slowly improves and macroeconomic pressures continue to ease, while demonstrating our return to profitability, as we plan courses of action to accelerate this growth.
‘In response to higher demand for Motorpoint cars, we have bolstered our team and have the firepower to restart investment in our estate, including the opening of new stores.
‘I am very excited by our plans to unlock further profitable growth, and we are in a strong position to continue increasing our share of the used car market.’
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The post Used car supermarket Motorpoint back in profitability after strong first six months of 2024 appeared first on Car Dealer Magazine.
