Motorpoint rebounds after challenging 2023 with strong Q1 retail sales growth

Used car supermarket Motorpoint’s faith in the future is being rewarded after a difficult 2023 as it reports strong retail sales growth in the first quarter of its financial year.

Expecting to meet its full-year goals, the company noted its healthy net cash position of around £6.5 million following the repurchase and cancellation of 2.5 million shares for £3.5 million.

Motorpoint's revenue had plunged by a quarter in 2023 with loss widening by £10m in a year which chief executive Mark Carpenter called “the most difficult in our history” after stock mix and vehicle price deflation hit it badly, with annual retail volumes contracting by 8.2%.

The macro environment has damaged car demand, with annual sector sales for 0-4 year old cars falling from 2.5m before the pandemic to 1.5m. 

In a January full-year update Motorpoint had reported that pre-tax losses grew to £10.4m from £300,000 last time, with sales slumping by a quarter to £1.09 billion.

The company however said it expected a better 2024/25 financial year on the back of increased supply following new car registration growth and used car market expansion.

At the time he said the business remained committed to long term growth, whilst focusing in the short term on margin improvement, cost base management and cash generation and measures that offered the best short term returns, adding that the group's use of data would remain vital in fulfilling those objectives.

He added that Motorpoint’s priorities for the year ahead included strengthening vehicle supply, pushing ahead with consumer digital engagement, using data to inform decision making and the introduction of new profit channels.

Carpenter also said he expected to recommence Motorpoint’s new dealership launch programme during FY25, due to the return of more positive market conditions.

Motorpoint had been on a programme of expansion and had built a network of 20 used car dealerships across England, Wales and Scotland, but it paused any further expansion last autumn after posting huge losses at its half-year trading.