AGM Trading Update

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 £2.2m at 30 June 2023 (with further facility headroom of £35m 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.£3m.  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 Mark Carpenter, Chief Executive Officer Chris Morgan, Chief Financial Officer	via FTI Consulting
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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