Motorpoint scores record revenue for the second consecutive year as used car prices continue to accelerate
- Motorpoint said sales grew by 9% to £1.44bn for the 12 months ending March
- The firm warned that annual pre-tax profits were set to ‘be broadly break even’
- Secondhand electric vehicle prices have slid significantly during the past year
Motorpoint Group achieved its second successive year of record turnover in 2022, thanks to a sustained rise in vehicle prices.
The Nottingham-based automotive dealer revealed revenue grew by 9 per cent to £1.44billion for the 12 months ending March after soaring by just over £600million the previous year.
But the group warned that pre-tax profits for 2023 were forecast to ‘be broadly break even,’ having noted in January that falling electric vehicle prices and rising financing costs were impacting margins.
Turnover: Motorpoint Group revealed revenue grew by 9 per cent to £1.44billion for the 12 months ending March after soaring by just over £600million the previous year
The cost of buying secondhand EVs in the UK has fallen significantly in the past year amid a supply-demand imbalance caused partly by the entry of cheaper Chinese-made models and easing parts shortages in the auto sector.
Recent figures from valuations expert Cap HPI showed that the 20 largest year-on-year average price drops among used cars last month were all EVs, with Tesla Model S prices down 30 per cent to £43,875.
For much of the coronavirus pandemic, used vehicle prices skyrocketed due to the production of new cars being hit by a paucity of semiconductors as purchases of goods like computers, mobile phones, and televisions increased.
This coincided with a release of pent-up demand when lockdown restrictions began loosening and unleashing a build-up of excess savings among Britons.
Sales growth has softened as the cost-of-living crisis forces many consumers to scale back on big-ticket items.
But Motorpoint said it was making ‘strong progress’ towards reaching its medium-term targets of online turnover exceeding £1billion and total sales surpassing £2billion this year.
Mark Carpenter, the firm’s chief executive, said new car registrations jumped by 18 per cent in March, buoyed by the fleet market growing for the eighth successive month.
Not only will this enhance the supply of used cars, he added, but ‘coupled with continued market share gains and progress on our key initiatives, will enable Motorpoint to emerge from the current environment a highly profitable market leader’.
Founded 25 years ago, Motorpoint runs 19 branches across the UK. It opened new sites in Edinburgh and Coventry last Autumn and is set to launch its 20th branch in Ipswich in May, followed by one in Milton Keynes.
Showroom openings form a part of the company’s strategy to double sales in the medium term from 2020 levels, as does spending on technology, automation and its Auction4Cars.com website.
Darren Shirley and Clive Black, analysts at broker Shore Capital, said: ‘Investment behind the well-versed and thought-through strategy continues unabated despite the cost-cash challenges facing some peers.
‘Motorpoint should be a significantly larger, more profitable, highly cash-generative group in the future.’
Motorpoint Group shares were 2.8 per cent higher at 134.75p when trading closed on Thursday, although they have contracted by over half in the last year.
