The CEO of Derby’s Motorpoint Group stated that the independent omnichannel vehicle retailer is strategically positioned to navigate through the current challenging macroeconomic cycle and emerge as a more streamlined and adaptable business. In a trading update for the six months ending 30 September 2023 (H1 FY24), the company acknowledged that the UK’s difficult macroeconomic conditions have hindered growth and profitability. As a result, Motorpoint swiftly and decisively took action to align its operations with the reduced market size and ensure profitable trading at lower levels of group sales.
These actions involved enhancing retail margins through data-driven pricing optimization, reducing auction fees by sourcing a higher proportion of stock through direct supply channels, streamlining the organizational structure, temporarily halting new store expansion, and reducing discretionary capital expenditure. The implementation of the right-sizing program proved beneficial to Motorpoint’s performance in the second quarter, despite the persisting challenging macro conditions.
During the first quarter, the company incurred an underlying loss before taxation of £3.1m, which narrowed to a loss of approximately £0.6m in the second quarter. For the half-year period, Motorpoint achieved an underlying operating profit of approximately £1.6m before accounting for interest expenses of £5.3m. Additionally, it experienced a one-off exceptional charge of approximately £1m related to redundancy costs.
Mark Carpenter, CEO of Motorpoint, emphasized that the demand for used cars continues to be impacted by factors like high inflation, interest rates, and consumer uncertainty. In response, the company has proactively reduced its cost base and expanded its retail criteria to facilitate customers in finding their desired cars at affordable prices.
Carpenter further highlighted that Motorpoint has successfully preserved cash while making progress on targeted strategic initiatives. Consequently, the company is well positioned to navigate through this challenging macroeconomic cycle and emerge as a more agile and efficient business. It aims to capitalize on the significant opportunities that will arise as market conditions improve.
The CEO of Derby’s Motorpoint Group stated that the independent omnichannel vehicle retailer is strategically positioned to navigate through the current challenging macroeconomic cycle and emerge as a more streamlined and adaptable business. In a trading update for the six months ending 30 September 2023 (H1 FY24), the company acknowledged that the UK’s difficult macroeconomic conditions have hindered growth and profitability. As a result, Motorpoint swiftly and decisively took action to align its operations with the reduced market size and ensure profitable trading at lower levels of group sales.
These actions involved enhancing retail margins through data-driven pricing optimization, reducing auction fees by sourcing a higher proportion of stock through direct supply channels, streamlining the organizational structure, temporarily halting new store expansion, and reducing discretionary capital expenditure. The implementation of the right-sizing program proved beneficial to Motorpoint’s performance in the second quarter, despite the persisting challenging macro conditions.
During the first quarter, the company incurred an underlying loss before taxation of £3.1m, which narrowed to a loss of approximately £0.6m in the second quarter. For the half-year period, Motorpoint achieved an underlying operating profit of approximately £1.6m before accounting for interest expenses of £5.3m. Additionally, it experienced a one-off exceptional charge of approximately £1m related to redundancy costs.
Mark Carpenter, CEO of Motorpoint, emphasized that the demand for used cars continues to be impacted by factors like high inflation, interest rates, and consumer uncertainty. In response, the company has proactively reduced its cost base and expanded its retail criteria to facilitate customers in finding their desired cars at affordable prices.
Carpenter further highlighted that Motorpoint has successfully preserved cash while making progress on targeted strategic initiatives. Consequently, the company is well positioned to navigate through this challenging macroeconomic cycle and emerge as a more agile and efficient business. It aims to capitalize on the significant opportunities that will arise as market conditions improve.
