Profits accelerate at car retailer despite revenue fall
Motorpoint, the Derby-based car retailer, has reported a “strong return” from lockdown as it reports its interim results for the six months to September 30.
While the enforced closure of its retail branches saw revenues down by 27% to £387.7m, profit before tax increased by 3% to £9.7m on the back of cutting operating expenses and strong trading when the first lockdown was eased in June.
“During a very challenging period, I am exceptionally proud of how the Group has responded. Through operational rigour and a focus on e-commerce solutions, the Group delivered an improvement in profit before tax against the prior year, despite a complete closure during the UK-wide lockdown from March 24th, and order fulfilment limited to home delivery only from May 21st. Since fully reopening all branches in July, demand levels have exceeded management’s expectations and indeed the prior year performance. Margins have also been above recent levels, reflecting strong customer demand and continued improvements in vehicle preparation speed and marketing effectiveness.
“The enforced closure of all branches resulted in substantial trading losses in April and May. Actions taken during the closure to preserve cash and reduce costs included suspending capital projects, reducing discretionary spending, furloughing a large proportion of our team and all of our Senior team Leadership Team and Board members taking voluntary pay reductions to help maintain our lowest paid team members at 100% of earnings. The Group returned to profitability in June.
“As a result of this strong trading since reopening, the Group delivered a profit before tax for the six months to 30 September ahead of the prior year. This underlines the strength and agility of the Motorpoint business model, its high-quality digital offering and the Group’s ability to react quickly to external challenges while maintaining its industry leading customer proposition. Notwithstanding the challenging macroeconomic backdrop, we look to the future with confidence as we continue to innovate and build on the strengths of our low-cost, independent, flexible operating model and leading brand to drive further market share growth.”