The CEO of Derby’s Motorpoint Group has said the independent omnichannel vehicle retailer is well positioned to emerge from the current difficult macroeconomic cycle a leaner and more agile business.
In a trading update for the six months ended 30 September 2023 (H1 FY24), the company noted that as a result of growth and profitability being hampered by the UK’s difficult macroeconomic conditions, it has taken “swift, decisive action to right-size the business to reflect the reduced market size and ensure cash generative trading at lower levels of group sales.”
Actions included increasing retail margins supported by the use of data to optimise selling prices, reducing auction fees by securing a greater proportion of stock through direct supply channels, streamlining the firm’s organisational structure, pausing new store roll out and reducing discretionary capital spend. The right-sizing programme proved helpful to Motorpoint’s performance in Q2 as difficult macro conditions continued.
The business shared that an underlying loss before taxation of £3.1m incurred in Q1 narrowed to a loss of c.£0.6m in Q2. For the half year, the business made an underlying operating profit of c.£1.6m before interest expense of £5.3m. It also incurred a one-off exceptional charge of c.£1m related to redundancy costs.
Mark Carpenter, CEO of Motorpoint, said: “The impacts of high inflation, interest rates, and consumer uncertainty continue to affect demand for used cars. We have responded by reducing our cost base and expanding our retail criteria to help customers find the car of their choice at a price they can afford.
“We have successfully preserved cash while making progress on selective strategic initiatives, and are well positioned to emerge from this difficult macroeconomic cycle a leaner and more agile business, ready to seize the significant opportunity as market conditions improve.”
