Motorpoint results hit by Covid-19
14 July 2020
Motorpoint, one of the UK’s largest used car supermarkets, has reported a drop in turnover and profit as its full year results for the 12 months to 31 March 2020 were impacted by the lockdown in March.
In its latest annual results Motorpoint saw a 15.3% fall in pre-tax profits to £18.8 million and a drop in revenue to £1.02 billion, down 3.8% on last year’s figures.
Commenting on sales since March, the group said volumes since sites reopened in June have been stronger than anticipated and ahead of the same month last year. Motorpoint reported a 50% increase in web traffic in June and that margins for both trade and retail were “robust”.
The group has also introduced a home delivery plus reserve and collect online options with 2,000 home delivery options completed in the past two months.
Mark Carpenter, CEO of Motorpoints, said: “Inevitably, the need to temporarily close our sites across the UK resulted in our full year trading performance being impacted, despite trading positively in the months prior to lockdown. However, we made great strategic and operational progress during the year, from the successful opening of our 13th location in Swansea – the first site which does not prepare its own vehicles – to the launch of our dedicated preparation centre in Peterborough, which has helped to improve the speed and effectiveness with which we prepare vehicles, in turn enhancing margins through sharper operational discipline.”
While Motorpoint remains one of the strongest auto retail share prices of the listed groups, it has seen a downward trend since its all-time high of 318p a share at the start of February.
Motorpoint, like other auto retail groups, saw its share price fall at the start of the Covid-19 lockdown, but has since partially recovered to 245p a share at the end of last week.
- Revenue of £1,018m, down (3.8)% (FY19: £1,058.7m), impacted by temporary site closures during lockdown in March, normally the Group’s busiest trading month
- Profit before taxation down (15.3)% to £18.8m (FY19 restated: £22.2m), substantially impacted by COVID-19 across March including the period of temporary closure
- Improved gross margin of 7.8%, up 30bps (FY19: 7.5%) thanks to improved operational processes
- Basic earnings per share of 16.4p (FY19 restated: 18.1p)
- Gross Profits to Overheads ratio reduced to 139.4% (FY19 restated: 146.9%) consistent with increased operating costs of new Swansea site and increased IT spend
- Cash generated from operations up £4.5m to £33.2m (FY19 restated: £28.7m)
- Strong operating cash conversion of 148.9% (FY19 restated: 112.5%)
- In light of the current environment, the Board is not proposing a final dividend for FY20 (FY19: final dividend 5.0p)