Motorpoint Group plc AGM Trading Update (1614H)
July 26 2023 - 2:00AM
UK Regulatory
TIDMMOTR
RNS Number : 1614H
Motorpoint Group plc
26 July 2023
26 July 2023
Motorpoint Group PLC
("Motorpoint" or the "Group")
AGM Trading Update
Motorpoint Group PLC, the UK's leading independent omnichannel
used vehicle retailer, is pleased to announce that John Walden,
Chair of Motorpoint, will make the following statement at the
Company's Annual General Meeting, to be held at 10:00am BST today,
which is an update on trading for the first quarter (Q1) of the
financial year ending 31 March 2024:
As highlighted in our recent Final Results on 14 June 2023, the
UK's difficult macroeconomic conditions hampered our growth and
profitability during the second half of FY23. In the face of these
challenges, we reinforced our commitment to our long term growth
ambitions but noted that, in the short term, we intended to focus
on increasing margins and reducing our cost base which in turn
should improve cash generation and profits, and provide an
opportunity for selective strategic investment.
As expected, these difficult macroeconomic conditions continued
into Q1. However, the Group had a net cash position of GBP2.2m at
30 June 2023 (with further facility headroom of GBP35m available)
driven by our continued focus on working capital management and
reduced capital spend. We took decisive action to lower the
required breakeven volume of the Group to a level which maintains
cash generative trading. Trading performance improved throughout Q1
and we expect this trend to continue in Q2 reflecting further
improvements in margin and cost base reductions.
The action undertaken in Q1 has included:
-- Improved retail margins supported by increased use of data to
optimise selling prices, without compromising on our industry
leading price leadership.
-- Securing a greater proportion of stock through direct supply
channels rather than auction as supply begins to open up, reducing
auction fees.
-- Streamlining our organisational structure, which will result
in a headcount reduction of c.10%, delivering annualised savings of
c.GBP3m. This is in addition to savings already made in the second
half of FY23.
-- Pausing new store roll out and reducing discretionary capital spend.
Outlook
As previously communicated, the impacts of high inflation,
rising interest rates, and consumer uncertainty continue to affect
demand for used cars. However, like others in the industry, we are
encouraged by the growing number of vehicle supply options which,
coupled with our increased use of data to determine optimum selling
prices, has resulted in an improvement in retail margin. This will,
in part, be tempered by lower finance commission as consumer uptake
for finance reduces due to increased APR rates. The Group has also
focused on the costs of the business to ensure they are aligned
with current market activity and, utilising the investment in
technology to date, we are able to maintain a lower headcount as we
conserve cash and return to profitability, whilst ensuring we are
ready to invest for growth as more favourable market conditions
return. The Group continues to be confident it will emerge in a
normalised market as a leaner and more valuable business ready to
seize a significant opportunity.
Enquiries:
Motorpoint Group PLC via FTI Consulting
Mark Carpenter, Chief Executive
Officer
Chris Morgan, Chief Financial
Officer
FTI Consulting (Financial PR)
Alex Beagley
Sam Macpherson
Harriet Jackson
Amy Goldup 020 3727 1000
Notes to editors
Motorpoint is the UK's leading independent E-commerce led
omnichannel vehicle retailer, focused on giving retail and trade
customers the easiest, most affordable and seamless way of buying,
selling and financing their car whether online, in store or a
combination of both. Through its leading B2C platform
Motorpoint.co.uk and UK network of 20 sales and collection stores,
the Group provides an unrivalled offering in the nearly new car
market, where consumers can effortlessly browse, buy or finance
their next car and collect or have it delivered directly to their
homes. Motorpoint's purely online wholesale platform
Auction4Cars.com sells vehicles into the wholesale B2B market that
have been part exchanged by retail customers, or purchased directly
from them by the Group as part of its online car buying service.
Motorpoint's diversified business model, underpinned by its
established brand, industry leading technology and sophisticated
marketing infrastructure, always delivers the best choice, value,
service and quality for customers. The Group is proud to have been
recognised for nine consecutive years as one of the Top 100 Best
Companies to Work For.
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