Motorpoint PLC takes profit hit as used car market slows

Motorpoint Group PLC (LSE:MOTR, OTC:MTPTF) saw its first-half profits slump and warned that conditions will be tough over the remainder of the year.

“Rising inflation and interest rates, consumer uncertainty and vehicle supply challenges are significantly affecting the used car market and will likely continue to impact financial performance,” the car dealer said in the interim results statement.

Revenue rose by 30% to a record £787mln in the six months to end-September 2022 with online revenues rising 21% to £351mln and reflecting new branches, an increase in premium models being sold and vehicle price inflation. 

Volumes of retail and wholesale (auction) vehicles sold both fell, however, with the trend accelerating as the half progressed. Wholesale sales dropped to 17,400 from 19,000 with 31,600 retail vehicles sold down from 34,400 a year ago

Motorpoint said it took a hefty margin hit to maintain its price competitiveness and market share with profits dropping 78% to £3mln (2021: £13.5mln) as a result.

Mark Carpenter, Motorpoint’s chief executive, said he was pleased with the progress despite increasingly difficult macroeconomic conditions.

Again there was no dividend with the money instead being used for investment plans, the company said.

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