Motorpoint Group is to ramp up its e-commerce offering as looks to double annual revenues to more than £2bn, the car retailer confirmed on Wednesday.
Motorpoint, which has 14 retail branches, said it would invest in online marketing, technology and data, as well as opening 12 new sales and collection branches, and expanding its Auction4Cars.com platform. It is targeting annual online revenues of over £1bn.
The strategic update came as Motorpoint – which specialises in the nearly-new market – posted revenues of £721.4m for the year to 31 March 2021, a 29.1% decline, after lockdown measures closed its dealerships for much of the year.
Gross profit eased to £62.5m from £78.9m, while pre-tax profit nearly halved, coming in at £9.7m from £18.8m a year previously.
A total of 68,000 vehicles were sold during the year. Of those, 69% were sold online, compared to 54% a year previously.
Since branches reopened on 12 April, Motorpoint said trading had been “strong and significantly ahead” of the same period two years ago, “reinforcing our belief that our customer-centric omnichannel proposition remains the most appropriate business model for the used car market.”
Mark Carpenter, chief executive, said: “We now have a fully-scaled home delivery service, an integrated end-to-end digital customer journey, additional capacity to growth through our increased preparation and branch presence, and an ambitious growth strategy to more than double revenue and profit in the medium term.
“I believe Motorpoint is the best in class in the nearly-new market. We now have an opportunity to grow rapidly as we continue our transformation into an e-commerce led business with huge potential.”
Numis said: “Covid has accelerated online penetration in the highly fragmented used car market, and Motorpoint is well-placed to leverage its leading nearly-new platform to accelerate market share gains in both retail and wholesale.
“We raise our year to March 2025 pre-Covid revenue and pre-tax profit forecasts by more than 40%.
“Despite rising competition, Motorpoint’s price-led focus on nearly-new vehicles, leading reputation and track record enable this premium growth profile, which leads us to raise out target price to 400p and reiterate [our] ‘buy’.”
As at 1430 BST, shares in Motorpoint were ahead nearly 2% at 283.5p.