(Sharecast News) – Automotive retailer Motorpoint delivered a stronger quarter-on-quarter performance on Thursday, driven by cost reductions and operational improvements across the group.
Underlying losses of £3.1m recorded in the first quarter of the year narrowed to a loss of £600,000 in the second. For the six months as a whole, Motorpoint made an underlying profit of roughly £1.6m before interest expenses of £5.3m. The group also incurred a one-off exceptional charge of roughly £1.0m which related to redundancy costs.
Motorpoint also said the affordability of used vehicles had been adversely affected by high prices and increasing APR finance rates. In response, the group broadened its selling criteria to include vehicles up to five years old and 50,000 miles. However, Motorpoint anticipates that used values will “gradually align to historic levels” as new car supply continues to improve.
The London-listed firm ended the period with net cash of £11.0m, up from £2.2m a year earlier, with further facility headroom of £35.0m available, demonstrating the “resilience of the business in difficult markets”.
Chief executive Mark Carpenter said: “The impacts of high inflation, interest rates, and consumer uncertainty continue to affect demand for used cars. We have responded by reducing our cost base and expanding our retail criteria to help customers find the car of their choice at a price they can afford.
“We have successfully preserved cash while making progress on selective strategic initiatives, and are well positioned to emerge from this difficult macroeconomic cycle a leaner and more agile business, ready to seize the significant opportunity as market conditions improve.”
As of 0950 BST, Motorpoint shares were up 2.08% at 88.71p.
Reporting by Iain Gilbert at Sharecast.com
