Motorpoint Group plc Full Year Trading Update and Notice of Results (7486U)

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RNS Number : 7486U

Motorpoint Group plc

08 April 2021

8 April 2021

Motorpoint Group PLC

("Motorpoint" or the "Group")

Full Year Trading Update and Notice of Results

Accelerated digital investment drives strong online revenue growth through lockdown

Motorpoint Group PLC, the UK's leading independent omni-channel vehicle retailer, provides the following update on its trading performance for the year ended 31 March 2021 ("FY21").

Highlights

   --    68,000 vehicles sold in the year, including 25,000 via the Group's Auction4Cars.com platform 
   --    E-commerce investment prioritised, and results exceeded the Board's expectations 
   --    52% of retail sales were sold online, over 22,000 units, with 3,300 sold in March alone 
   --    Q4 (Jan-Mar 2021) online sales grew 89% against prior year, with Home Delivery 57% of this 

-- Balance sheet remains robust with no structural debt, and net cash at the year-end was c.GBP6m

   --    H2 Net Promoter Score (NPS) of 83 
   --    Employee Engagement at record levels 

The Group delivered a robust volume performance in the period, underlining the strength of Motorpoint's omni-channel model and in particular, the momentum and potential of its online channel. 68,000 vehicles were sold, including 25,000 wholesale units through Auction4Cars.com. Of the retail sales 52% were sold online (over 22,000 units), retaining our position as the number one retailer of nearly new cars in the UK, both online and offline.

The Group has prioritised investment in E-commerce, launching contactless collections, a free Home Delivery service, a 14-day money back guarantee and, most recently, a fully digital part exchange and finance offering enabling customers to complete their purchase process entirely online. These initiatives build from a strong history of online sales and previous investment in automation and data utilisation. In the first three months of 2021, when all retail branches were closed, online sales grew 89% against the equivalent period last year, with Home Delivery contributing 57% of this. In March alone, 3,300 units were sold online. The results from our accelerated investment to date have exceeded the Board's expectations and E-commerce will continue to be our priority moving forward.

The Group is utilising the strong footprint of existing retail locations to act as spokes for distribution and collection nationwide, enabling same day in-branch collection and next-day home delivery. Motorpoint serves all car buyers, whatever their location, and whether they wish to buy online, in-person at our branches or through a combination of both channels. Motorpoint customers are delighted with the unrivalled choice, value, service and quality they receive, underlined in our recent Net Promoter Score (NPS) of 83 in H2.

Auction4Cars.com, the UK's leading E-commerce vehicle auction service sells wholesale vehicles outside Motorpoint's retail criteria and provides valuable insight into vehicle values. Gross margin for the first three months of 2021 was c.7.5%, substantially ahead of the same period last year (6.2%).

Group revenues for the year were 29.0% lower compared to the previous year, as a consequence of the COVID-19 pandemic and Government imposed lockdowns. Group operating profit broadly broke even in the second half, despite all retail branches being closed for over four of the six months of the period (representing 67% closure across the estate). The Group's balance sheet remains robust with no structural debt, and net cash at the year-end was c.GBP6m.

Outlook

In line with the Government's roadmap, the Group's retail branches in England and Wales are scheduled to fully re-open on 12 April, and on 26 April in Scotland, and the Board anticipates pent-up consumer demand upon re-opening. The Board also expects growing momentum for its E-commerce, Home Delivery and Reserve and Collect services as consumer buying habits evolve. The accelerated expansion of our E-commerce offering, coupled with new sales and collection branches provides the Board with a high level of confidence in the Group's potential to gain further market share.

Nevertheless, the Board expects that the impact of COVID-19 will continue to influence events in the new financial year, and given this uncertainty, believes it prudent to refrain from offering future guidance at this time. The position is under constant review, and an update will be provided when appropriate to do so.

Preliminary Results

The Group expects to announce its Preliminary Results for the year ended 31 March 2021 on 16 June 2021.

Mark Carpenter, CEO of Motorpoint, said:

"Motorpoint continues to take market share by offering great value to our customers, combined with a huge choice of high quality vehicles and a strong customer service focus. Our employees have been exemplary in their commitment to the business during the year, with team engagement scores reaching their highest level in the second half of the year. The continued safety of our employees and customers remains of utmost importance as we prepare to re-open branches this month.

I am delighted at the progress we have made by retaining and growing our Technology and Marketing teams during the lockdowns. Our focus on growing our E-commerce and Home Delivery channels continued in H2 with further milestones achieved. Thanks to our focus on innovation, along with our low-cost, agile operating model and market leading brand strength, Motorpoint is well positioned to take advantage of the continued shift of consumers to purchase online, whilst also continuing to access the currently larger in-branch market."

Enquiries:

 
Motorpoint Group PLC               via FTI Consulting 
 Mark Carpenter, Chief Executive 
 Officer 
 Chris Morgan, Chief Financial 
 Officer 
 
  FTI Consulting (Financial PR) 
  Alex Beagley 
  James Styles 
  Sam Macpherson                     020 3727 1000 
 

Notes to editors

Motorpoint is the UK's leading independent omni-channel vehicle retailer, selling through its E-commerce platforms of Motorpoint.co.uk and Auction4Cars.com and 14 retail branches. The Group's principal business is the sale of nearly-new vehicles, the majority of which are up to two years old and have covered less than 15,000 miles. Motorpoint sells vehicles from brands representing over 95 per cent of new vehicle sales in the United Kingdom, with models from Ford, Vauxhall, Volkswagen, Nissan, Hyundai, Audi and BMW being amongst the top sellers. The Group operates from 14 retail branches across the United Kingdom: Birmingham, Birtley, Burnley, Castleford, Chingford, Derby, Glasgow, Newport, Oldbury, Peterborough, Sheffield, Stockton on Tees, Swansea and Widnes, of which six have opened in the last five years; together with E-commerce channels for retail and trade, supported by a customer contact centre.

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April 08, 2021 02:00 ET (06:00 GMT)