Motorpoint profits fall amid 'challenging' conditions

Vehicle retailer Motorpoint reported a drop in first-half profit on Thursday amid "challenging" conditions.

In the six months to the end of September, pre-tax profit fell 18.3% to £9.4m as overheads increased by about £2m, with revenue up just 1% to £533.9m. Basic earnings per shares declined 14% to 8p and the interim dividend was lifted 4% to 2.6p a share.

Motorpoint said current trading was consistent with management's full-year expectations, albeit with a greater weighting towards the second half. However, it also said that potential outcomes from the Brexit negotiations "could influence our future performance in unpredictable ways".

Chief executive officer Mark Carpenter said: "Against a challenging environment, the group has delivered a resilient trading performance, underpinned by revenue growth and robust cash generation.

"The first half of the year has seen significant growth in our market share despite ongoing market disruption, with the political situation leading to another period of lacklustre consumer confidence. Specifically, within the used car market, the early summer months was also a period of unusually high pressure on margins."

The company also announced that founder and non-executive director David Shelton will retire from the board at the end of the year.

At 1000 GMT, the shares were up 2.3% at 261.88p.

Broker Liberum said the first-half results were in line with the pre-close guidance and its estimates.

"Trends are as expected, with Motorpoint taking share in a subdued trading environment," it said. "We make no change to our FY20 estimates, but note that Q4 (to March) represents circa 40% of profits, so much depends on the macro/political environment and its impact on consumer confidence. The longer-term growth prospects remain strong."