Motorpoint chief executive Mark Carpenter has said the £5 million sale of the used car supermarket group’s Stockton site will provide the business with “further firepower” for growth.
The car retail PLC announced in a statement issued via the London Stock Exchange this morning (April 20) that it had completed a sale-and-leaseback agreement on the location, which was acquired ahead of the car supermarket’s opening in December 2020.
Motorpoint has entered into a 25-year lease (with tenant only break points) at an initial rent of £350,000 per annum as part of the agreement, stating that “this resulted in no gain or loss for the group”.
At the same time, Motorpoint also announced an agreement with its lenders to further increase its available stocking facility by £30m to £195m – up from £106m at FY22 half year – to provide "enhanced vehicle buying flexibility".
Carpenter said: “We are pleased to have agreed both the sale and leaseback of our Stockton branch and a further increase in our stocking facilities.
“Both transactions provide further firepower for us to invest in future growth strategies across multiple initiatives in line with our strategy.”
Last month Motorpoint's retail footprint expanded to 16 used car retail locations with the opening of a new two-acre, 120-vehicle dealership in Maidstone.
The opening, coming five months after Motorpoint Manchester opened its doors, is part of a medium-term business strategy through which the business is aiming to almost treble its revenues to £2 billion.
Announced in June last year the plan will see the group: open 12 new sales and collection branches, on top of its 14-site network at the time; substantially increase investment in marketing, technology and data; and leverage its Auction4Cars.com platform to accommodate new supply channels and launch a new “marketplace offering”.
Motorpoint’s financial results for the 12-month period to March 31 detailed revenues down 29.1% to £721.4m in the COVID-19 hit period, with profit before tax down 48.4%, from £18.8m in 2019 to £9.7m as gross margin improved from 7.8% to 8.7%.
A later H1 2021 trading update revealed turnover growth of 57% and pre-tax profits up 30% in the six-month period to September 30.