Half Year Trading Update & Notice of Results

RNS Number : 4428B

Motorpoint Group plc

08 October 2020

 

8 October 2020

Motorpoint Group PLC

("Motorpoint" or the "Group")

Half Year Trading Update and Notice of Results

Motorpoint Group PLC, the UK's leading independent omni-channel vehicle retailer, announces the following trading update ahead of its Interim Results for the half year ended 30 September 2020.

Since the Group's sites reopened from the UK-wide lockdown in early June, demand levels have exceeded management's expectations with strong year on year sales growth.  Margin has been above recent levels reflecting continuing improvements in vehicle preparation speed and our pricing methodology.

On 23 March the Group closed all sites and preparation centres in line with Government regulations to help manage the Covid-19 pandemic.  Our ten sites in England reopened on 1 June and our three Welsh and Scottish sites reopened during July.  This enforced closure resulted in combined losses of £3.4m in April and May.  Actions taken during the closure to preserve cash and mitigate losses included suspending capital projects, reducing discretionary spending, furloughing a large proportion of our team and all of our senior team taking voluntary pay reductions.  The Coronavirus Job Retention Scheme and Business Rates relief measures introduced by the Government helped to reduce the costs incurred by the Group by c.£3.8m in H1.  The Group returned to profitability in June.

During lockdown, the Group accelerated investment in its digital offering and launched a free Home Delivery service. As a result, online sales growth outpaced our physical estate sales growth in the remainder of H1 and grew to c.36% of sales in the three months to 30 September 2020, a volume increase of c.50%.  Our free Home Delivery service is now available nationally and represented c.8% of sales in the same three month period, from zero only six months ago. The increase in demand has meant that we have created around 30 additional preparation and customer service logistics roles since reopening.

As a result of this strong trading since reopening, profit before tax for the six months to 30 September will be ahead of the prior year.  The Group's balance sheet is robust, with no structural debt and net cash of c.£13m at 30 September 2020.  This result underlines the strength and agility of the Motorpoint business model and the Group's ability to react quickly to external challenges while maintaining its industry leading proposition of offering customers unrivalled choice, value and service.

Outlook

The Board is confident that the Group's ability to adapt quickly to changing market dynamics and access new markets through new site openings, growing online sales and adding home delivery capacity will continue to grow our market share across the UK.  The expansion of physical retail sites continues with our 14^th sales and collection location scheduled to open in Stockton on Tees at the end of 2020.  Supply of stock remains at good levels and margin is being maintained above the prior year.

The increase of Covid-19 cases in recent weeks and resultant Government restrictions will subdue demand in the short term as consumer confidence is negatively impacted, as we have seen in certain of our sites affected by local lockdown restrictions.  Given such uncertainty on future demand levels, the Board believes it prudent to continue to refrain from offering guidance at the current time. This will remain under review and a further update will be provided at the Interim Results.

Interim Results

The Group will publish its Interim Results for the half year ended 30 September 2020 on 26 November 2020.

Mark Carpenter, CEO of Motorpoint, said:

"I would like to thank all of our people for their hard work and resilience through these unprecedented times. The Group has emerged from lockdown in great shape and this is testament to the team and their agility and adaptability in these ever-changing times. Our Home Delivery and Click & Collect offerings continue to gather momentum and I look forward to opening our 14^th retail site, in Stockton on Tees, at the end of 2020.

"As a result of the Group's performance in the three months since our sites reopened, and notwithstanding the potential of future regional or nationwide lockdowns, the Board continues to look to the future with confidence."

Enquiries:

Motorpoint Group PLC Mark Carpenter, Chief Executive Officer	via FTI Consulting
FTI Consulting (Financial PR) Alex Beagley James Styles Sam Macpherson	020 3727 1000

Notes to editors

Motorpoint is the largest independent vehicle retailer in the United Kingdom. The Group's principal business is the sale of nearly-new vehicles, the majority of which are up to two years old and which have covered less than 15,000 miles. Motorpoint sells vehicles from brands representing over 95 per cent of new vehicle sales in the United Kingdom, with models from Ford, Vauxhall, Volkswagen, Nissan, Hyundai, Audi and BMW being amongst the top sellers. The Group operates from 13 retail sites across the United Kingdom: Birmingham, Birtley, Burnley, Castleford, Chingford, Derby, Glasgow, Newport, Oldbury, Peterborough, Sheffield, Swansea and Widnes, of which five have opened in the last five years; together with a national contact-centre dealing with online enquiries.

More information is available at www.motorpointplc.com and www.motorpoint.co.uk .

 

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