Motorpoint Group (MOTR) raises full-year expectations
By Rob Griffin
10:33, 25 November 2021
UK vehicle retailer Motorpoint Group has revealed a record-breaking first-half performance due to strong consumer demand for used cars.
The company’s revenues hit £605.2m ($806.1m) for the six months to the end of September – 56% up on the same period last year – while pre-tax profits rose 39.2% to £13.5m.
The upbeat results mean the company expects full-year pre-tax profits to come in “significantly ahead” of its expectations.
Supply chain problems
In a statement to the London Stock Exchange, the company warned that the ongoing constriction in the supply of new vehicles is expected to continue into 2022 – and beyond.
But it reassured investors that it had used its market position to access more stock to satisfy customer demand, both online and in branch.
“This increased demand reinforces our belief that our customer-centric, omnichannel proposition remains the most appropriate business model for the used car market,” Motorpoint stated.
Market share gains
CEO Mark Carpenter noted favourable market conditions had helped make it a record first half of the year for the company.
However, he pointed out that the market share gains achieved demonstrated the “unique strengths” of its business model.
“We continued to invest in future growth with strong progress made on our medium-term strategic targets as we execute on our goal of at least doubling revenue to over £2bn in the medium term,” he said.
Sanjay Vidyarthi, a senior analyst at Liberum, has maintained his ‘buy’ recommendation on the stock and raised the target price to 450p.
“The strength of the first half profit performance in a supply-constrained market, alongside significant investment for longer-term growth, is impressive,” he said.
Vidyarthi noted that strategic and operational initiatives were being rolled out at pace to accelerate growth and take market share aggressively.
“Motorpoint remains on track to achieve its target of doubling sales to £2bn in the medium term,” he said.
Motorpoint also reaffirmed its commitment to the longer-term strategy of delivering “unrivalled” choice, value, service and quality.
The company’s medium-term goals are fourfold:
- Rapidly upscaling e-commerce capability
- Increasing customer acquisition and retention
- Expanding wholesale and e-commerce channels
- Continual improvement in operational efficiency through technology and innovation.
Motorpoint also announced that Mark Morris had decided to retire as non-executive chair after 11 years with the group. He will leave the business in January 2022.
“Mark has played an extremely instrumental role in helping the business grow to become the UK’s leading independent omnichannel vehicle retailer, not least successfully guiding Motorpoint through its IPO in 2016,” it stated.
He will be replaced by John Walden, who is currently chair of Snowfox Topco, the ultimate parent company of the Yo! group and the Snowfox Group.