Motorpoint announces a return to profitability following last year’s losses, predicting approximately £2m pretax profit for the first half of the fiscal year.
- The company attributes its financial recovery to an easing of macroeconomic pressures and a resurgence in consumer demand.
- Retail volume sees a notable increase of 17 per cent year over year, showcasing strong momentum for the company.
- Interest rate cuts in August are perceived as a contributing factor to improved market conditions and profitability.
- Despite ongoing supply challenges, Motorpoint’s strategic business adjustments yield positive financial outcomes.
Motorpoint has reported a significant financial turnaround, forecasting a pretax profit of around £2m for the six months leading up to September. This marks a substantial improvement compared to the pretax loss of £3.7m recorded in the same period of the previous year. The company’s resurgence is largely attributed to an easing of macroeconomic pressures and a notable increase in customer demand, as reported by City AM.
A noteworthy achievement for the period was a 17 per cent increase in retail volume during the first half of the fiscal year. Motorpoint anticipates this strong momentum to persist into the next six months, suggesting a period of sustained growth. The firm indicated that improvements in market conditions, such as stabilised used car prices and margins, as well as enhanced customer sentiment, have played a pivotal role in its recovery.
The interest rate cut in August has been welcomed by Motorpoint, suggesting that further reductions would likely bolster their profitability even more. However, the company acknowledges that the supply of used vehicles remains subdued. Despite this challenge, strategic efforts to ‘right size’ the business have successfully aligned it with recovering demand, facilitating its return to profitability.
A testament to the company’s resilience, Motorpoint’s shares have appreciated by nearly 40 per cent this year. This rebound comes after enduring what it termed the ‘most difficult year’ in its history, culminating in a significant loss of £10.4m for the year ending in March. Mark Carpenter, Motorpoint’s CEO, has remarked on the robust nature of the company’s business model, affirming its adaptability and readiness to pursue accelerated growth strategies. The company has scheduled the announcement of its interim results for 27 November, further shedding light on its economic strategies.
Motorpoint’s strategic adjustments and favourable market shifts have reversed previous losses, positioning the company for continued growth.
