Improved results for Motorpoint after tough start to the year

Derby’s Motorpoint has reported a reduction in losses following the workforce reductions implemented during the summer.

In July the used car retailer announced it was getting rid of one in ten of its staff in the hope of saving £3m a year.

This was in response to the car market slowing due to higher prices and higher cost of credit and partly due to customer uncertainty.

The business decided to sell older cars with higher mileage, expecting better sales as new car supplies increase and used car prices drop.

In April-June, it reported a pre-tax loss of £3.1m, which was reduced to £600,000 in July-September, but it also incurred one-time redundancy costs of £1m.

However, the trading update stated that due to a healthy cash position, the company resumed investments and opened its 20th store in Ipswich in May.

Additionally, in the year ending June, its share of the 0-4 year old used car market increased from 3.2% to 3.4%.

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.”