One of the largest used car supermarkets in the UK, Motorpoint, had “the most difficult year” in its history as people buy fewer cars for cheaper, compounded by an industry-wide shortage of pre-owned vehicles.
The Derby-headquartered company made a £10.4m pre-tax loss in the financial year ending March 31, 2024, up from £300,000 the previous period.
Its revenue also fell to £1bn from £1.4bn, with retail volumes dropping eight per cent in the first half but bouncing back by around nine per cent in the final two months of the period.
CEO Mark Carpenter said he believed the stronger performance seen in the second half of the year pointed to the group being able to turn things around in 2025.
He said: “The past financial year was the most difficult in our history, with multiple negative headwinds in the macro environment such as rising borrowing costs and subdued customer demand, coupled with industry specific issues such as lower inventory and deflation.
“The resilience of our cash generation evidences the strength of our business model and we now look forward to continuing our journey of profitable growth as the improving trends of Q4 have continued into Q1.
“Following the rightsizing exercise of FY24, we now have a lean, technology-enabled business. I am very confident in our ability to scale profitability and cash generation as the market improves, which will allow us to invest further in growth.”
Motorpoint said it expected the supply of used cars to grow over coming months due to the increased number of people registering new cars, in turn easing stock shortages.
The company added that it believed there was “substantial potential” to turn this into strong profit growth and cash generation as it “leverages its lower cost base with increased volumes” and realise its “long term ambition to lead the UK used car market”.