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Motorpoint Group PLC on Thursday said in its half year trading update that macroeconomic factors continue to stall progress as it struggles with substantial profit losses.
For the first half ended September 30, the Derby-based omnichannel vehicle retailer expects pretax profit of around £3 million, a significant decrease from £13.5 million a year prior.
Motorpoint said that this decline reflected additional costs, including an increased strategic investment of around £4 million, and interest costs of around £1.0 million. It also said numbers for the first half suffered in comparison to the ‘record margins’ of last year.
This was despite higher revenue of around £785 million, up 30% year-on-year from £605.2 million, which was attributed to vehicle mix and price inflation.
Looking forward, the business said rising inflation, interest rates, and worldwide vehicle supply chain challenges would continue to present roadblocks for the used car market.
While it remains cautious in the short term, Motorpoint said that it will continue to invest for the long term ‘in a weakening competitor landscape’ by prioritising customers and opening new locations.
Its 19th location is due to be opened in Coventry at the end of October 2022.
At period end, the group had a net cash position of around £4.5 million, down 42% from £7.8 million on March 31, 2022. It expects stocking finance headroom of around £70 million, and has stocking facilities of £195 million.
Motorpoint shares were trading 16% lower at 149.55 pence each in London on Thursday morning.
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