Motorpoint Group has predicted reduced half-year profits ahead of its annual general meeting this morning.
The ID50’s top independent used car retailer by turnover said that, while it expected revenues to rise during the six month period to September 30, tighter margins would lead to reduced profitability.
Addressing the car supermarket giant’s AGM today (July 23), Mark Morris, chairman of Motorpoint, will state: “Motorpoint has achieved revenue growth over the first three months of the financial year despite the challenging consumer environment and ongoing uncertain political backdrop.
“The Board believes that this growth reflects further encouraging market share gains against a declining market.
“Gross Margin has performed below last year’s strong comparative period, impacted by unusually high supply levels.
“This margin pressure is expected to result in Motorpoint reporting a profit for the six months ending 30 September 2019 below the same period last year.”
Morris will add, however, that the business has experienced a strengthening margin trend in July.
His statement reveals that, combined with the impact of improved business processes, the Motorpoint Board believes the business is “well placed to continue to take market share and remains confident in its full year outlook.”
In June, Motorpoint published annual financial results for the period to March 31, 2019, which revealed 6.8% turnover growth and 10% growth in profit before taxation and exceptional items.
It grew its annual revenues to £1.06bn and pre-tax profits before exceptional items to £22.9m in the period as it prepared to expand into the 13th site in its national retail network.
Chief executive, Mark Carpenter, said: “We have continued to gain market share, thanks to our value-orientated, customer-friendly proposition which has resulted in a record number of repeat customers coming through our doors along with consistently high levels of customer satisfaction being reported.
“Our 13th retail site is expected to open in the second half of the current financial year and we are committed to bringing the Motorpoint brand closer to more people across the UK.”