REG - Motorpoint Group plc - FINAL RESULTS
13/06/2024 07:00
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RNS Number : 2279S Motorpoint Group plc 13 June 2024
13 June 2024
Motorpoint Group PLC
("Motorpoint" or the "Group")
Final Results
A challenging year driven by macroeconomic headwinds. Return to profitability
in Q4 and good momentum going into FY25
Motorpoint Group PLC, the UK's leading independent omnichannel vehicle
retailer, today announces its final results for the year ended 31 March 2024
("FY24").
Financial Summary
Year ended 31 March 2024 Year ended 31 March 2023 Change
Revenue £1,086.6m £1,440.2m -£353.6m
Gross profit £73.1m £85.7m -£12.6m
Gross profit margin 6.7% 6.0% +70 bps
Underlying((1)):
Operating expenditure £(72.9)m £(79.2)m +£6.3m
Loss before taxation £(8.2)m £(0.3)m -£7.9m
Loss for the period £(6.4)m £(0.6)m -£5.8m
Reported:
Operating expenditure £(80.6)m £(79.2)m -£1.4m
Finance expense £(9.8)m £(7.1)m -£2.7m
Loss before taxation £(10.4)m £(0.3)m -£10.1m
Loss for the period £(8.4)m £(0.6)m -£7.8m
Net cash((2)) £9.2m £5.6m +£3.6m
(1) Excluding exceptional operating expenses of £(7.7)m, exceptional other
income of £5.6m, exceptional finance expense of £(0.1)m and exceptional
income tax income of £0.2m (FY23: All £Nil)
(2) Cash less any borrowings, excluding lease liabilities
· Revenue decreased by 24.6% to £1,086.6m (FY23: £1,440.2m), influenced by
market headwinds, stock mix and vehicle price deflation. Retail volumes
declined by 8.2% in the year, but recovered strongly in the final quarter,
growing 8.9% on equivalent quarter in FY23
· Gross profit declined by 14.7%, reflecting the volume decline and reduced
finance commissions, which were influenced by the high interest rate
environment. Gross profit accelerated in the final quarter due to
strengthening volume growth and improved data driven vehicle pricing activity
· Underlying operating expenditure reduced by 8.0%, due to restructuring and
lower marketing spend as performance marketing was prioritised
· Net exceptional costs before taxation of £2.2m (FY23: £Nil) related largely
to the restructuring programme, with the balance relating to the costs of the
previously announced Derby flood and related insurance receipts
· Increase in finance expense reflects interest rate rises, in part offset by
lower stock levels, thus reducing funding requirements
· Total loss after taxation was £(8.4)m (FY23: £(0.6)m), with the main drivers
being the volume decline and impact of high interest rates
· Strong improvement in cash, despite lower profitability, which reflects
working capital management and reduced capital investment. No structural debt
as at 31 March 2024
Operational and Strategic Highlights
· Prioritised improving unit metal margins, reducing operating costs and
generating cash rather than pursuing continued market share growth, given the
macroeconomic backdrop
· Returned to market share growth in Q4. Market share based on SMMT data (up to
six year old cars) for the full year was 2.1% (FY23: 2.2%), but improved to
2.3% in Q4 versus 2.2% for the same quarter in FY23
· Increased retail margins supported by the use of data to optimise selling
prices, streamlined organisational structure, paused new store roll-out and
reduced strategic investment
· Focus on stock management, including clearing through aged vehicles, resulted
in days in stock reducing by 12% to 45 days
· Technology investment focused on further tangible improvements to our website,
enhancing customer experience and product information; estimated 10% increase
in digitally led sales
· Automation benefits, including a portal to simplify vehicle handovers, a new
open banking solution for faster payment and reduced bank fees, simplified
Auction4Cars buying and financing, and new technology to verify vehicle
mileage
· Continued strong progress against ESG objectives, and proudly recognised by
the Financial Times as a leader in climate change across the European business
sector
· Strong cash generation provided the Board with confidence to commence the
share buyback programme (to purchase and cancel up to 5 million shares) in
March 2024
· Recommitment to investments in new capabilities, digitally driven customer
experiences and new stores in order to take a long term leadership role in the
UK used car market
Current Trading and Outlook
· Positive start to FY25; April and May both profitable:
· Double digit growth in retail sales volumes
· Metal margins remain strong and used car prices stable
· Successful execution of our Brilliant Basics restructuring programme during
FY24 will stand the business in good stead moving forwards as the market
continues to improve
· Our lean cost base, strong data driven focus on margins, faster stock turn and
enhanced digital capabilities should enable us to continue the Q4 FY24 trend
of profitable growth
· We envisage that 2023's difficult macro conditions will continue to ease with
customer sentiment improving. Supply should increase following new car
registration growth, and used car market expansion
· Therefore, we believe that there is substantial potential to realise strong
profitable growth and cash generation as we leverage our lower cost base with
increased volumes
· As performance improves we look forward to resetting and re-energising our
strategic goals, including further new store opportunities, against our long
term ambition to lead the UK used car market
Mark Carpenter, Chief Executive Officer of Motorpoint Group PLC commented:
"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."
Analyst & investor webinar
There will be a webinar for sell-side analysts and investors at 9:00am BST
today, the details of which can be obtained from FTI Consulting via
motorpoint@fticonsulting.com (mailto:motorpoint@fticonsulting.com) .
Enquiries:
Motorpoint Group
PLC
via FTI Consulting
Mark Carpenter, Chief Executive Officer
Chris Morgan, Chief Financial Officer
FTI Consulting (Financial PR)
Alex
Beagley
020 3727 1000
Harriet Jackson
Amy Goldup
Forward looking statements: The information in this release is based on
management information. This report includes statements that are forward
looking in nature. Forward looking statements involve known and unknown risks,
assumptions, uncertainties and other factors which may cause the actual
results, performance or achievements of the Group to be materially different
from any future results, performance or achievements expressed or implied by
such forward looking statements. Except as required by the Listing Rules and
applicable law, the Company undertakes no obligation to update, revise or
change any forward looking statements to reflect events or developments
occurring after the date of this report.
Notes to editors
Motorpoint is the UK's leading independent omnichannel vehicle retailer,
focused on giving retail and trade customers the easiest, most affordable and
seamless way of buying, selling and financing their car whether online, in
store or a combination of both. Through its leading B2C platform
Motorpoint.co.uk and UK network of 20 stores, the Group provides an unrivalled
offering in the nearly new car market, where consumers can effortlessly
browse, buy or finance their next car and collect or have it delivered
directly to their homes. Motorpoint's purely online wholesale platform
Auction4Cars.com sells vehicles into the wholesale B2B market that have been
part exchanged by retail customers, or purchased directly from them by the
Group as part of its online car buying service. Motorpoint's diversified
business model, underpinned by its established brand, industry leading
technology and sophisticated marketing infrastructure, always delivers the
best choice, value, service and quality for customers.
Non-Executive Chair's statement
Strategic Opportunity
Three years ago, Motorpoint announced a departure from its historic approach
by more aggressively embracing the role of technology and digital services in
its business and setting forth more ambitious medium term goals to at least
double its revenue to over £2bn by, among other things, growing its
E-commerce revenue to over £1bn and opening 12 new stores. Reaching these
goals would require transformative levels of investment in new capabilities
including technology and automation, data and analytics, digital commerce,
marketing, new sales and service stores and its omnichannel customer
proposition.
Since this announcement, in spite of the significant economic challenges
affecting the used car market and Motorpoint in particular, the Company has
progressed towards its goals by hiring key strategic leaders, developing new
technologies and digital capabilities, and refining its strategy to include
specific further capabilities that will position Motorpoint uniquely in the
market. Although this progress has been constrained by economic and market
factors, nevertheless our belief in the strategic direction and the size of
our opportunity has grown.
The use of digital services is becoming universal amongst car buyers and
sellers. This natural progression presents an opportunity for retailers to
disintermediate portions of the used car market by selling direct to consumers
through a lower cost, higher service model, by buying direct from consumers or
via new online marketplaces, and by building brand leadership and market share
through aggressive marketing. However we have learned, based on our customer
data, that some degree of physical connection continues to be preferred by
most customers to provide reassurance and trust in the transaction.
Motorpoint, as a leading omnichannel retailer, is uniquely positioned to serve
this need and is developing integrated consumer journeys across its digital,
store, customer service and delivery channels that will meet changing consumer
needs. This is Motorpoint's central strategic opportunity.
Underpinning Motorpoint's new capabilities will be contemporary technology and
data practices. These will not only create unique cross channel customer
journeys, but will improve efficiency in our key processes such as selling,
vehicle preparation, logistics, pricing and inventory turnover.
Leading With Agility and Responsibility
With its focus on the long term strategic growth opportunity, Motorpoint has
faced very difficult markets which have challenged its near term performance
and investment capacity. In Motorpoint's 2022 financial year (FY22), the Covid
pandemic was over; however supply chain shortages continued to limit the
manufacturing of new vehicles, used car prices were inflated due to
constrained supply, and consumer confidence was declining as consumers began
feeling the effects of general inflation and rising interest rates. Motorpoint
performed strongly in that year with record revenue, growth in market share
and strong operating profit. While many in the market were cautious,
Motorpoint recommitted to its ambition to lead the UK's used car market by
investing in new capabilities, digitally driven customer experiences and new
stores.
During FY23, economic and market conditions deteriorated further, especially
in the second half. Rising inflation and interest rates, coupled with
constrained used car supply, inflated prices and a significant OEM induced cut
in used electric vehicle values, made trading particularly challenging.
Further, high interest rates affected several components of our profit model.
High consumer finance rates reduced consumer demand and pinched unit
profitability, Motorpoint's finance commissions reduced as it tried to hold
consumer rates below market, and its finance expense on inventory borrowings
increased. In the face of these challenges Motorpoint continued to make
prudent strategic investments in order to progress towards its strategic
ambition while attempting to remain profitable and preserve cash. Motorpoint's
operating profit fell, its net profit before tax was roughly breakeven while
it managed to again grow revenues and market share.
As the Company approached FY24, it believed that economic and market
conditions would not improve and indeed could worsen further with no end in
sight. In fact, economic conditions during FY24 were the most difficult in
Motorpoint's 25 year history. High interest rates, price deflation,
constrained used vehicle supply and depressed consumer demand intersected
causing several industry consolidations, a high visibility administration and
massive industry losses. For Motorpoint, it reacted early in the year to
implement a rightsizing and margin improvement programme with an aim to limit
losses and preserve cash in a smaller, persistently difficult market. It
prioritised increasing unit margins, reducing operating expenses and
generating cash over revenue and market share growth. It also tempered
strategic investments and focused on efficiency, trading effectiveness and
near term returns. Although the year was loss making, by the final quarter
Motorpoint was back to growth and profitability.
I am pleased that Motorpoint has been agile and resilient through a tumultuous
period and made sound decisions based on changing market conditions. It has
also remained committed to its strategic plan in a manner that has balanced
its investments responsibly and brought substantial new technology, digital,
marketing and operational expertise into the business. Motorpoint is now well
positioned to reverse the FY24 loss and extend its profitability and cash
generation as the market improves further, to set new expectations for medium
term growth, and to recommit to investments in new capabilities, digitally
driven customer experiences and new stores in order to take a long term
leadership role in the UK used car market.
I would like to thank the Motorpoint team for their extraordinary
contributions over an extended period. I look forward to a positive future for
the Company and all of our colleagues.
John Walden
Non-Executive Chair, Motorpoint PLC
13 June 2024
Chief Executive's statement
Overview
Difficult macroeconomic conditions hampered our growth and profitability for
much of FY24. There was also a shortage of good quality, nearly new vehicles.
We took decisive action to rightsize the business to reflect the reduced
market size and ensure cash generative trading at lower levels of Group sales.
The external headwinds did ease in Q4, and this, along with the results of our
actions taken during the year, meant we returned to profitable growth in the
last three months of FY24, with retail sales up 8.9%.
High interest rates and inflation were a key feature throughout FY24 and
fuelled consumer uncertainty, and the market for our 0-4 year old sector
reached a low point of 1.5m sales per annum, from a pre Covid high of 2.5m.
This, along with deflation and stock mix, influenced our revenue fall to
£1,086.6m (FY23: £1,440.2m) and retail units sold were 52.6k. (FY23: 57.3k),
despite a strong final quarter with significant year on year growth. In
addition, the high market prices and APR rates have reduced affordability for
consumers. To counteract this, we expanded our retail criteria so that the
majority of cars were less than five years old and 50,000 miles, to help
customers find the right vehicle in accordance with more constrained household
budgets.
These reduced retail volumes, pressure on finance attachment rates due to high
APRs, and high stock interest expense, resulted in a drag on profitability,
and the business returned a loss before taxation and exceptional items of
£(8.2)m (FY23: loss before taxation £(0.3)m). As a consequence of actions
taken, and an easing in headwinds, the business returned to profitability in
the final quarter, which coincided with year on year retail volume growth.
For much of the year we prioritised protecting profit and cash. Helped by use
of improved data analysis, we were able to improve unit margins, introduce an
affordable administration fee and increase A4C fees (but still below the
market norm). We also rightsized our headcount to reflect the lower volumes
and reduced marketing costs. FTEs at 31 March 2024 were 710, significantly
down from the high of almost 950 in the early part of FY23.
Despite the profitability pressures, the Group again demonstrated its
resilience to end the year with net cash excluding lease liabilities of £9.2m
(FY23: £5.6m). There is significant cash headroom, with the £20.0m (FY23:
£35.0m) bank facility undrawn at year end. Of this, £6.0m (FY23: £6.0m) is
available as an uncommitted overdraft and £14.0m (FY23: £29.0m) as a
revolving credit facility.
Focusing on Brilliant Basics in FY24
Our focus on driving operational excellence through a programme we call
Brilliant Basics has resulted in a lean cost base, faster stock turn and lower
prices, with the cumulative effect of consistent profitability in the final
three months of the year.
The market challenges in FY24 required decisive action to rightsize the
business and refocus our priorities on the established basics which have
served us so well historically. This included a thorough review of our
headcount requirements, and a plan to ensure that all roles in the business
have accountability measures, with strengthened reporting. We reviewed our
margin performance, supported by the use of data, and stock mix, to ensure we
have the right vehicles for customers at the right price. Our agile sourcing
model allowed us to expand vehicle age and mileage criteria to offer lower
price points to meet broader customer demand. We saw the benefits of this with
strong performance in the final quarter. We also looked at our ancillary
offering in Q4 and extended our warranty product to cover customers for an
additional year (now up to three years). This quickly resulted in an uplift in
revenue and profitability, and helped offset the impact of the removal of the
asset protection product.
Strategy Update
We have made good progress against our strategic targets announced in June
2021. Despite the market challenges during FY24, we remain committed to our
long term growth aspirations, whilst focusing in the short term on margin
improvement, cost base management and cash generation, and strategic
objectives that offer the best short term returns. The strong cash position
allowed us to continue making targeted strategic investment, with further
improvements in technology involving both our retail and wholesale businesses,
and we opened our 20th store, in Ipswich, in May 2023.
During FY24, we continued to enhance our digital capability, and upscale our
E-commerce offering. We made improvements to the website Product Detail Pages
(PDPs) and introduced new imagery. These changes improved page views and the
time customers spend on our site. Saved search and recommendation
functionality was introduced. Email alerts are now in place to inform
customers when the vehicle they are looking for has arrived. We experienced
record levels of organic traffic, and website speed improved by 43.5% in March
2024 compared to April 2023.
The Group's use of data is fundamental to how we operate. As well as helping
to inform vehicle pricing decisions, it supports the identification of what
vehicles customers desire. As an example, it allowed us to identify that new
customers are more likely to buy cheaper vehicles than returning ones, and
this helped inform our decision to expand our retail criteria. In addition, we
now send up to four emails a week to consumers, compared to just one
historically.
We have strengthened our Data Insight team by recruiting external talent, and
by harnessing the benefits of automation we have been able to continue to
deliver operational improvements, from preparation speed and reduced
stockholding to customer self-serve technology. Automation allowed us in the
year to improve efficiency and reduce headcount.
Our priorities for the year ahead include strengthening our vehicle supply,
pushing ahead with consumer digital engagement, using data to inform decision
making and the introduction of new profit channels. We also expect to
recommence our new store opening programme during FY25, now that we see the
market returning.
The Motorpoint Virtuous Circle remains at the core of everything we do
Our operating model of how our employees and stakeholders interact, the
Motorpoint Virtuous Circle, combined with our Values of Proud, Happy, Honest
and Supportive continue to provide a robust framework for explaining how we
get things done and what factors to consider when decisions are required.
The Virtuous Circle begins with our employees. In the final quarter we
conducted our Driving Seat survey for all team members, which highlighted
strong satisfaction levels across the business. Our values scored highly, with
95% of the team who responded saying that they were Proud to work for
Motorpoint.
We sponsor multiple initiatives to enhance our team's experience with
Motorpoint. Our 'One Big Dream' initiative has been a huge success, with our
people using two paid hours per month for their own fulfilment. Team retention
levels improved over the year, with staff turnover falling from 32% in April
2023 to 27% in March 2024.
Our One Team ethos was perfectly highlighted when the Derby store was badly
flooded in October 2023. This resulted in significant disruption for employees
and customers, and required a major clean up operation. I am very proud of our
employees from across the business (whether it be from the office, other
locations or the Derby store itself) who all pulled together to ensure that
the site was up and running again within four weeks, and that customers were
not left disappointed.
We believe that the engagement of our team is directly correlated to our
customers' satisfaction. As we innovate our omnichannel customer experiences,
our highly engaged team continued to deliver what we believe is a market
leading proposition of Choice, Value, Service and Quality to our loyal
customers with an unerring focus on customer satisfaction. Our NPS for sold
vehicles remains at industry leading levels at 82 (FY23: 84).
During the year, we introduced new products and services to enhance the
customer experience. For example, we expanded our retail criteria to ensure we
held more affordable vehicles, and improved our warranty product by extending
the length of cover available. In the last few months of FY24, in response to
increased customer demand, we recruited additional team members in our busier
stores to ensure that the high standards of customer experience were
maintained.
The final piece of our Virtuous Circle is delivering for our shareholders. The
external headwinds did impact profitability in the year, although we improved
cash generation and had the confidence to commence the share buyback, to
benefit shareholders. The improvement in performance in the final quarter
provides further confidence that we can look forward to delivering strong
profitable growth and cash generation.
Environmental, Social and Governance (ESG)
The Group's ESG Committee continues to be instrumental in setting out
appropriate ESG targets. The Group wants to be viewed as the most
environmentally friendly used car retailer and has made significant progress
on its ESG strategic goals.
We are delighted that our progress was recognised by the Financial Times
naming Motorpoint as one of Europe's Climate Leaders, who are most successful
in reducing their core greenhouse gas emissions. We have championed our
commitment to energy management through internal communication channels.
Due to the nature of our business, most emissions relate to Scope 3 and the
use of sold products. However, Scope 3 emissions did decrease year on year by
21%, although much of this was driven by a reduction in products sold and mix
of vehicles. Going forward, we remain dependent on original engine
manufacturers (OEMs) in respect of increasing the supply of zero emission
vehicles. We expect our Scope 3 emissions to decrease as the UK transitions to
a lower carbon economy, particularly in relation to cessation of sales of new
internal combustion engine (ICE) vehicles from 2035.
In terms of what we can directly control, we have made further, good progress
in energy savings. Like for like Scope 1 and 2 emissions and business travel,
are down 14% versus the previous year based on tonnes of carbon relative to
the square foot area of the business. Waste collection costs are also down
15%, and less than 0.2% waste went to landfill.
We also have made further improvements to support inclusion and remove
unconscious bias, and our gender pay gap has again reduced.
Outlook
Successful execution of our Brilliant Basics restructuring programme during
FY24 will stand the business in good stead moving forwards as the market
continues to improve. Our lean cost base, strong data driven focus on margins,
faster stock turn and enhanced digital capabilities should enable us to
continue the Q4 FY24 trend of profitable growth. We envisage that 2023's
difficult macro conditions will continue to ease with customer sentiment
improving. Supply should increase following new car registration growth, and
used car market expansion. Therefore, we believe that there is substantial
potential to realise strong profitable growth and cash generation as we
leverage our lower cost base with increased volumes. As performance improves,
we look forward to resetting and re-energising our strategic goals, including
further new store opportunities, against our long term ambition to lead the
UK used car market.
Mark Carpenter
Chief Executive Officer
13 June 2024
FINANCIAL REVIEW
Strong final quarter with growth in retail units sold, improved margins and a
subsequent return to profitability, following a challenging year influenced by
economic headwinds
Group financial performance headlines
Revenue reduced to £1,086.6m (FY23: £1,440.2m) reflecting the shrinkage of
the nearly new used car market and economic headwinds. Retail units sold fell
from 57.3k in FY23 to 52.6k, although we returned to year on year growth in
the final quarter. Affordability became an increasingly big issue for
consumers, and we prioritised stock mix with less expensive vehicles.
Consequently, during FY24, we relaxed our age and mileage criteria to ensure
that we have the vehicles that customers desire and can afford.
Gross profit was £73.1m (FY23: £85.7m). Gross margin improved in the year to
6.7% (FY23: 6.0%), largely due to our focus on improving metal margin, which
includes using data to determine optimum pricing at a given time, as well as
the introduction of an administration fee, which is now in line with much of
the market. Finance commission per vehicle sold reduced, following the fall in
average selling prices and the impact of increased APRs.
Despite inflation, operating expenses before exceptional items reduced by 8.0%
to £72.9m (FY23: £79.2m), largely reflecting a decrease in headcount and
lower marketing spend.
Net exceptional expense before taxation of £2.2m (FY23: £Nil) largely
relates to costs following a one-off restructuring review in the year with the
balance relating to the costs of the previously announced Derby flood and
related insurance receipts.
As a consequence of the challenging external conditions, loss before taxation
and exceptional items was £(8.2)m (FY23: £(0.3)m).
Despite the lower profitability, and as management took decisive action, net
cash excluding lease liabilities, improved to £9.2m at the year end (FY23:
£5.6m).
Trading performance
The Group has two key revenue streams, being (i) vehicles sold to retail
customers via the Group's stores, call centre and digital channels, and (ii)
vehicles sold to wholesale customers via the Group's Auction4Cars.com website.
Retail customers Wholesale
customers
Total
FY24 FY23 FY24 FY23 FY24 FY23
£m £m £m £m £m £m
Revenue 931.1 1,175.7 155.5 264.5 1,086.6 1,440.2
Gross profit 64.3 74.5 8.8 11.2 73.1 85.7
Retail
Revenue from retail customers was down 20.8% to £931.1m (FY23: £1,175.7m),
with 52.6k (FY23: 57.3k) vehicles sold (a fall of 8.2%). The remainder of the
revenue fall reflected the lower price of vehicles sold. The year on year
trend improved from a fall of 18.4% in the first half, with growth of 8.9% in
the final quarter. Consumer demand has picked up, and we have benefited from
the numerous enhancements made to our digital presence during the past year
which, among other things, is generating significantly more website traffic.
In the year, 32.4% of vehicles were sold online and we continue to see
around two thirds of customers wanting the store experience for their vehicle
purchase.
Gross margin of 6.9% was a good improvement given the headwinds experienced
(FY23: 6.3%), with the strengthening of metal margin offsetting the impact of
higher APRs on finance commission. We have seen a fall in attachment rates due
to the higher cost of finance. Finance per vehicle sold therefore decreased in
the period, following this increase in interest rates and lower price points,
reflecting mix and deflation. Penetration was 46% (FY23: 56%). Our APR finance
rates continue to be competitive despite increasing from 11.9% to 12.9% at the
start of October 2023.
We continue to develop our customer proposition and have added a new three
year warranty product which has been well received by our customers and has
offset the removal of our asset protection product following FCA instruction
to all insurers to voluntarily withdraw the product.
Our 20th and newest store opened in May 2023 in Ipswich. During the year, we
also disposed of the lease for our unopened property in Milton Keynes. This
was a site we acquired in FY23 but had not incurred any material development
costs.
Wholesale
Wholesale revenue via Auction4Cars.com, which sells vehicles that have been
part exchanged by retail customers, or directly purchased from consumers,
decreased by 41.2%. With the relaxation of the retail age and mileage
criteria, the number of vehicles sold through the wholesale channel
significantly decreased. Around 25.4k vehicles were sold via this purely
online platform. Gross margin of 5.7% (FY23: 4.2%) improved from the previous
year with greater focus on reducing the number of loss making vehicles sold
through this platform.
Operating expenses before exceptional items
Our cost management remains tightly controlled, with notable savings achieved
in people costs following FY24's rightsizing programme and efficiencies
resulting from technology investment.
Operating expenses before exceptional items decreased from £79.2m in FY23 to
£72.9m. Despite the new store opened, overall full time equivalent employees
reduced to 710 at year end from 789 at 1 April 2023, as we continually focused
on efficiency in stores, preparation and Head Office, and rightsized our
headcount to reflect market conditions. Energy rates (for the property
portfolio at the time) were fixed for two years in September 2021, and we
experienced an increase in unit rates from October 2023, therefore. However,
following a focused approach to managing usage, along with a milder winter,
meant we experienced a reduction of 15% in electric and gas consumption
compared to FY23 on a per square footage basis. Property costs increased by 9%
and included the opening of the Ipswich store in May 2023, and the full year
effect of FY23 openings. Marketing costs decreased from £14.0m to £10.0m as
we target a more focused approach, as well as responding to the lower consumer
demand for much of FY24.
Other income before exceptional items
Other income before exceptionals of £1.3m (FY23: £0.3m) includes business
interruption insurance proceeds in respect of the closure of the Derby site
following the flooding in October 2023, and subsequent reduced trading with
the opening of the temporary showroom.
Exceptional items
Net exceptional items before taxation of £2.2m (FY23: £Nil) constituted
restructuring costs for various redundancies associated with the headcount
rightsizing programme (£1.1m), the write down of delivery vehicles which are
being disposed of following the driver redundancies associated with the above
(£0.2m), and cost relating to the disposal of the Milton Keynes lease
(£0.5m), along with the net of assets written off following the Derby flood
not covered by insurance.
On a gross basis, exceptional operating expenses were £7.7m (FY23: £Nil)
which included the flood damaged assets written off and the restructuring
costs. Exceptional other income of £5.6m (FY23: £Nil) included insurance
receipts against those written off assets.
Interest
The Group's finance expense was £9.8m (FY23: £7.1m); the increase reflects
the sharp rise in cost of borrowing, despite lower inventory.
Total interest charges on the stocking facilities in the period were £7.1m
(FY23: £4.7m). Interest on lease liabilities was £2.0m (FY23: £2.0m) and on
banking facilities £0.7m (FY23: £0.4m).
Taxation
The tax credit (FY23: charge) in the period is for the amount assessable for
UK corporation tax in the year net of prior year adjustments and deferred tax
credits. The tax credit was £2.0m (FY23: £0.3m charge), reflecting the loss
in the year.
Earnings per share
Basic and diluted earnings per share were both (9.3)p (FY23: both (0.7)p).
Dividends
No dividend was paid in the period (FY23: £Nil) and the Board has not
recommended a dividend (FY23: £Nil).
Capital expenditure
Cash capital expenditure reduced to £2.6m (FY23: £9.4m) as the business
preserved cash and cut discretionary spend, with additions primarily relating
to the new store in Ipswich and ongoing IT projects.
Balance sheet
Net assets decreased in the year in line with the loss made. Working capital
was proactively managed, in particular ensuring that stock purchasing was
maximised through the funding facilities.
Non-current assets were £64.4m (31 March 2023: £75.2m) made up of £8.8m of
property, plant and equipment, £50.5m of right-of-use assets, intangible
assets of £3.7m and a deferred tax asset of £1.4m (31 March 2023: £13.1m,
£58.4m, £3.7m and a deferred tax liability of £0.2m respectively). The
Group currently owns one remaining freehold plot of land in Glasgow, which is
being held for sale. All other properties are on leases of various lengths.
The Group closed the period with £102.4m of inventory, down from £148.6m at
31 March 2023. Days In Stock for the year reduced to 45 days (FY23: 51 days).
As at 31 March 2024, the Group had £150.0m (31 March 2023: £195.0m) of
stocking finance facilities available of which £74.5m (31 March 2023:
£102.5m) was drawn. The Group had available stocking facilities with Black
Horse Limited of £75.0m, and £75.0m with Lombard North Central Plc. During
the year it was agreed with Black Horse Limited to reduce the amount available
to £75.0m from £120.0m, to reflect the unused portion. In addition, the net
asset covenant test was reduced from £30.0m to £20.0m.
The Group also has a £20.0m (FY23: £35.0m) facility with Santander UK Plc,
split between £6.0m available as an uncommitted overdraft and £14.0m
available as a revolving credit facility. During the period it was agreed with
Santander UK Plc to reduce the revolving credit facility from £29.0m to
£14.0m. The overdraft remained the same. As part of this negotiation the
fixed charge covenant test was reduced from 1.25:1.00 cover to 1.00:1.00 until
September 2025.
Trade and other receivables have slightly increased to £19.2m (31 March 2023:
£18.4m), due to the timing of receipts over the year end, which coincided
this year with the Easter Bank Holidays.
Trade and other payables, inclusive of the stock financing facilities, have
reduced during the year to £107.1m (31 March 2023: £143.8m) mainly as a
result of the reduction in stocking facility utilisation, reflecting lower
inventory levels.
The decrease in total lease liabilities to £57.0m (31 March 2023: £63.6m)
reflects the repayments made during the period, and the removal of the Milton
Keynes lease.
Cash flow
Despite a loss for the year of £(8.4)m (FY23: £(0.6)m) cash increased by
£3.6m. This included the benefit of working capital improvement and low
capital expenditure. Cash flow generated from operations was £19.3m inflow
(FY23: £41.3m inflow) and therefore remains strong.
Capital structure and treasury
The Group's objective when managing working capital is to ensure adequate
working capital for all operating activities and liquidity, including
comfortable headroom to take advantage of opportunities, or to weather short
term downturns. The Group also aims to operate an efficient capital structure
to achieve its business plan.
In January 2024, we announced our intention to commence a share buyback
programme of approximately 5% of the ordinary shares of the Company, and to
cancel these shares. Even after taking into consideration the capital required
to fund organic growth, the Company's cash generation and the strength of its
balance sheet has led the Board to conclude that the programme is an
attractive use of the Company's resources and beneficial for all shareholders.
As at 31 March 2024, 190,001 shares had been purchased and cancelled,
representing 3.8% of the planned buyback programme. Accordingly, the Company's
issued share capital at year end comprised 89,999,884 ordinary shares (31
March 2023: 90,189,885).
The Group's long term funding arrangements consist primarily of the stocking
finance facilities with Black Horse Limited and Lombard North Central Plc (to
a maximum of £150.0m) and an unsecured loan facility provided by Santander UK
Plc, split between £6.0m available as an uncommitted overdraft and £14.0m
available as a revolving credit facility. During FY24, the Group successfully
extended its terms on the unsecured loan facility with Santander UK Plc. This
agreement now runs until June 2026 with the option to extend for two further
one year extensions if agreed by both parties.
Chris Morgan
Chief Financial Officer
13 June 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
Note 2024 2024 2024 2023
£m £m £m £m
Before exceptional items Exceptional items (1) Total
Revenue 3 1,086.6 - 1,086.6 1,440.2
Cost of sales 4 (1,013.5) - (1,013.5) (1,354.5)
Gross profit 73.1 - 73.1 85.7
Operating expenses 4 (72.9) (7.7) (80.6) (79.2)
Other income 1.3 5.6 6.9 0.3
Operating profit / (loss) 1.5 (2.1) (0.6) 6.8
Finance expense (9.7) (0.1) (9.8) (7.1)
Loss before income tax (8.2) (2.2) (10.4) (0.3)
Income tax income / (expense) 1.8 0.2 2.0 (0.3)
Loss for the year (6.4) (2.0) (8.4) (0.6)
Other comprehensive expenses: (0.1) - (0.1)
Items that will not be reclassified to profit or loss
Tax relating to items which will not be reclassified to profit or loss
(0.1)
Other comprehensive expense (0.1) - (0.1) (0.1)
Total comprehensive expense for the year attributable to equity holders of the (6.5) (2.0) (8.5) (0.7)
parent
Earnings per share attributable to equity holders of the parent
Basic 6 (9.3p) (0.7p)
Diluted 6 (9.3p) (0.7p)
(1) Detail on exceptional items is provided in note 5
The Group's activities all derive from continuing operations.
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2024
Note 2024 2023
£m £m
ASSETS
Non-current assets
Property, plant and equipment 8.8 13.1
Right-of-use assets 50.5 58.4
Intangible assets 3.7 3.7
Deferred tax assets 1.4 -
Total non-current assets 64.4 75.2
Current assets
Inventories 102.4 148.6
Trade and other receivables 19.2 18.4
Current tax receivable - 1.3
Cash and cash equivalents 9.2 5.6
Assets held for sale 2.6 -
Total current assets 133.4 173.9
TOTAL ASSETS 197.8 249.1
LIABILITIES
Current liabilities
Trade and other payables, excluding contract liabilities (107.1) (143.8)
Borrowings 7 - -
Lease liabilities (4.0) (3.4)
Total current liabilities (111.1) (147.2)
Net current assets 22.3 26.7
Non-current liabilities
Lease liabilities (53.0) (60.2)
Provisions (2.6) (2.6)
Deferred tax liabilities - (0.2)
Total non-current liabilities (55.6) (63.0)
TOTAL LIABILITIES (166.7) (210.2)
NET ASSETS 31.1 38.9
EQUITY
Called up share capital 8 0.9 0.9
Capital redemption reserve 0.1 0.1
Capital reorganisation reserve (0.8) (0.8)
EBT reserve (5.1) (5.3)
Retained earnings 36.0 44.0
TOTAL EQUITY 31.1 38.9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
Called up share capital Capital Capital EBT reserve Retained Total equity
redemption reserve
reorganisation reserve
earnings
£m
£m
£m
£m £m £m
Balance at 1 April 2022 0.9 0.1 (0.8) (4.7) 43.9 39.4
Loss for the year - - - - (0.6) (0.6)
Other comprehensive expense for the year - - - - (0.1) (0.1)
Total comprehensive expense for the year - - - - (0.7) (0.7)
Transactions with owners in their capacity as owners:
Share‑based payments - - - - 0.9 0.9
EBT share purchases and commitments - - - (0.7) - (0.7)
Share-based compensation options satisfied through the EBT - - - 0.1 (0.1) -
- - - (0.6) 0.8 0.2
Balance at 31 March 2023 0.9 0.1 (0.8) (5.3) 44.0 38.9
Loss for the year - - - - (8.4) (8.4)
Other comprehensive expense for the year - - - - (0.1) (0.1)
Total comprehensive expense for the year - - - - (8.5) (8.5)
Transactions with owners in their capacity as owners:
Share‑based payments - - - - 1.0 1.0
Buyback and cancellation of shares - - - - (0.3) (0.3)
EBT share purchases and commitments - - - - - -
Share-based compensation options satisfied through the EBT - - - 0.2 (0.2) -
- - - 0.2 0.5 0.7
Balance at 31 March 2024 0.9 0.1 (0.8) (5.1) 36.0 31.1
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
2024 2023
£m £m
Loss for the year attributable to equity shareholders (8.4) (0.6)
Adjustments for:
Taxation (credit) / charge (2.0) 0.3
Finance expense 9.8 7.1
Operating (loss) / profit (0.6) 6.8
Share-based payments 1.0 0.1
Impairment of assets held for sale 0.2 -
Loss made on assignment of lease 0.2 -
Depreciation and amortisation charges 9.9 9.4
Cash flow from operations before movement in working capital 10.7 16.3
Decrease in inventory 46.2 79.8
Increase in trade and other receivables (0.8) (4.8)
Decrease in trade and other payables (36.8) (50.0)
Cash generated from operations 19.3 41.3
Interest paid on borrowings and financing facilities (7.8) (5.1)
Interest paid on lease liabilities (2.0) (2.0)
Income tax received / (paid) 1.6 (1.1)
Net cash generated from operating activities 11.1 33.1
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets (2.6) (9.4)
Proceeds from disposal of property, plant and equipment and right-of-use - 9.7
assets
Net cash (used in) / generated from investing activities (2.6) 0.3
Cash flows from financing activities
Payments to acquire own shares (0.3) -
Payments to satisfy employee share plan obligations - (0.7)
Repayment of principal element of leases (4.6) (5.9)
Repayment of borrowings (24.0) (57.0)
Proceeds from borrowings 24.0 28.0
Net cash used in financing activities (4.9) (35.6)
Net increase / (decrease) in cash and cash equivalents 3.6 (2.2)
Cash and cash equivalents at the beginning of the year 5.6 7.8
Cash and cash equivalents at end of year 9.2 5.6
Net cash and cash equivalents comprises: Cash at bank 9.2 5.6
1. General information
Motorpoint Group Plc (the 'Company') is incorporated and domiciled in the
United Kingdom under the Companies Act 2006.
The Company is a public company limited by shares and is listed on the London
Stock Exchange; the address of the registered office is Champion House,
Stephensons Way, Derby, England, United Kingdom, DE21 6LY. The consolidated
financial statements of the Group as at and for the year ended 31 March 2024
comprise the Company, all of its subsidiaries and the Motorpoint Group Plc
Employee Benefit Trust (the 'EBT'), together referred to as the 'Group'. The
financial statements are presented in pounds sterling because that is the
currency of the primary economic environment in which the Group operates.
Going concern
In accordance with the UK Corporate Governance Code 2018, the Board has
assessed the prospects of the Group over a period in excess of 12 months from
the date of signing the Group financial statements as required by the 'Going
Concern' provision, by selecting the period to the end of December 2025.
The Group has managed its net debt comfortably, with headroom at the year end
of £14.0m on the Revolving Credit Facility, which was undrawn at the year
end. Total headroom, including the stocking facilities, undrawn facilities and
available cash, was in excess of £100.0m at the year end. During the year the
Company renegotiated the terms of both its Revolving Credit Facility, and
stocking facilities, reducing available headroom from £29.0m and £195.0m to
£14.0m and £150.0m respectively. The renegotiation secured improved terms
for the Group's financial covenants, following the challenging economic
circumstances experienced in FY24, and reflected the Group's current lower
financing requirements. The Board considers that the available headroom,
coupled with the cash generative nature of the business and the available cash
levers provide a strong degree of financial resilience and flexibility.
Scenarios:
In making their assessment the Directors considered the Group's current
balance sheet and operational cash flows, the availability of facilities, and
stress testing of the key trading assumptions within the Group's plan. A range
of scenarios have been assessed by the Directors, including various possible
downside scenarios against the base case. The Directors opted to model a
specific scenario designed to create the conditions required to breach
covenants within the going concern period as well as a plausible downturn on
the base case.
Scenario Outcome
Base Case The Group is not in breach of any financial covenants and is not in a drawdown
position on the Revolving Credit Facility at the end of the going concern
Based upon the Group's most recent approved forecasts. period. The Group is able to meet all forecast obligations as they fall due.
The base model assumes a recovery of profitability and unit volumes in FY25,
based on current run rates of year on year unit volume growth, and a prudent
estimate based on growth in the used car market. Thereafter, modest growth is
applied as the business resumes its strategic goal of taking more market
share.
Plausible Downturn The Group is not in breach of any financial covenants and is not in a drawdown
position on the Revolving Credit Facility at the end of the going concern
Top down stress testing was applied to the base case model, taking into period. The Group is able to meet all forecast obligations as they fall due.
account a plausible downturn in business performance, relative to possible
economic pressure and stagnation in the growth of the used car market.
This included volume and margin pressure, reducing revenue by 15% and an
overall gross profit reduction compared to the base case of 21%. Fixed costs
were inflated in this scenario by three percent in each year.
Reverse Stress Test This scenario is designed to result in a covenant breach within the assessed
going concern period.
A scenario created to model the circumstances required to breach the Group's
covenants within the going concern period. Management believes that the combination of severe downsides to be remote, and
that there are mitigating factors over and above those built into the reverse
The Board considered the potential impacts in preparing the stress test. The stress test modelling which the Board would consider to avoid a covenant
below scenario was analysed: breach.
Reducing revenue (32% decrease from the base case) and decreasing gross profit
overall by 38% through additional margin pressure.
The selection of the assumptions for the sensitised case is inherently
subjective, and whilst the Board considered these assumptions to reflect a
downside scenario, the future impact of economic downturn, interest rate rises
or inflating overhead costs is impossible to predict with absolute accuracy.
Whilst the same applies to the reverse stress test, we note that this scenario
is specifically designed to demonstrate the point at which the covenants
breach during the going concern period. The reverse stress test reflects, in
the Board's opinion, a remote circumstance and mitigating factors could be
implemented to avoid a covenant breach in this scenario.
Scenario modelling has been considered throughout the year and at year end by
management to formulate response options against moderate or severe downturns
in sales volumes, potential margin pressures and possible cost challenges.
The Group's available headroom stands at £14.0m (FY23: £29.0m) through its
Revolving Credit Facility "RCF" agreement. The Group also has an uncommitted
overdraft facility of £6.0m which remains in place and was undrawn at the
year end. Both are in place until June 2026 with the option to extend for two
further one year extensions if both parties are agreed. With respect to the
Group's stocking facilities, these have reduced from £195.0m to £150.0m
during the year which the Board deem appropriate given current market
conditions.
The Directors took action in the year to obtain covenant relief for its RCF
agreement and for one of its stocking loan arrangements, reflecting a response
to the reduction in overall headroom against covenants in FY24. The relief
obtained has been agreed until September 2025 for the RCF and an indefinite
relaxation was agreed on the net assets covenant with Black Horse Limited in
relation to its stocking loan facility.
In the eventuality of a period of prolonged economic downturn resulting in
material reductions in sales volume or prices, as well as rising overhead
costs, it is possible that the Group would need to negotiate changes to its
current banking covenants, but such an extreme downturn is not currently
considered plausible.
The Group continues to consider and monitor further potential mitigation
actions it could take to strengthen its cash position and reduce operating
costs in the event of a more severe downside scenario. Such cost reduction and
cash preservation actions would include but are not limited to: reducing spend
on specific variable cost lines including marketing and store trading
expenses; team costs, most notably sales commissions; pausing new stock
commitments; and reviewing expansionary capital spend, dividends and share
buyback activity.
The Group has continued to demonstrate a flexible approach to trading and
despite the constriction in the supply of nearly new vehicles, which is
expected to slowly ease, the Group has been able to use its market position to
access more stock to satisfy customer demand, both online and in store.
The Directors have also made use of the post year end trading performance to
confirm that performance is in line with expectation. Whilst only a short
period has passed since the year end, this evidence suggests that this is the
case. Based on this assessment, the Board confirms that it has a reasonable
expectation that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period to 31 December 2025.
The Board has determined that the period to December 2025 constitutes an
appropriate period over which to provide its going concern assessment. This is
the period detailed in our base case model which we approve each year as part
of the strategic review. Whilst the Board has no reason to believe the Group
will not be viable over a longer period, given the inherent uncertainty
involved we believe this presents users of the Annual Report and Accounts with
a reasonable degree of confidence while still providing a medium term
perspective.
New standards, amendments and interpretations
The Group has not early adopted standards, interpretations or amendments that
have been issued but are not mandatory for 31 March 2024 reporting periods.
The following amended standards and interpretations effective for the current
financial year, have been applied and have not had a significant impact on the
Group's consolidated financial statements in the current or future reporting
periods and on foreseeable future transactions.
● Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
● Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2
● Definition of Accounting Estimates - Amendments to IAS 8
Basis of preparation
The financial information set out in this document does not constitute the
statutory financial statements of the Group for the year end 31 March 2024
within the meaning of Section 435 of the Companies Act 2006 but is derived
from the Annual Report and Accounts 2024. This financial information is
prepared in accordance with UK-adopted International Accounting Standards and
the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The auditor has reported on the annual
financial statements included within the Annual Report and Accounts 2024 and
issued an unqualified opinion and the auditor's report did not contain a
statement under section 498 of the Companies Act 2006.
The financial statements for the year ended 31 March 2023 have been delivered
to the Registrar of Companies and the auditor's report was unqualified and did
not contain a statement under section 498 of the Companies Act 2006.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company, entities controlled by the Company (its subsidiaries) and the
Motorpoint Group Plc Employee Benefit Trust made up to 31 March each year.
The EBT is consolidated on the basis that the Company has control, thus the
assets and liabilities of the EBT are included in the balance sheet and shares
held by the EBT in the Company are presented as a deduction from equity. The
EBT has been solely set up for the purpose of issuing shares to Group
employees to satisfy awards under the various share-based schemes and has no
ability to access or use assets, or settle liabilities, of the Group.
Subsidiaries are all entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases. Intercompany
transactions and balances between Group companies are eliminated on
consolidation.
2. Segmental reporting
The Group has prepared segmental reporting in accordance with IFRS 8
'Operating Segments'. The Group's chief operating decision maker is considered
to be the Board of Directors. Segmental information is presented on the same
basis as the management reporting. An operating segment is a component of the
business where discrete financial information is available and the operating
results are regularly reviewed by the Group's chief operating decision maker
to make decisions about resources to be allocated to the segment and to assess
its performance.
Operating segments are aggregated into reporting segments to combine those
with similar characteristics.
The Group operates its omnichannel vehicle retailer offering through a store
network and separate financial information is prepared for these individual
store operations. These stores are considered separate 'cash generating units'
for impairment purposes. However, it is considered that the nature of the
operations and products is similar and they all have similar long term
economic characteristics and the Group has applied the aggregation criteria of
IFRS 8. In addition, the Group operates an independent trade car auction site
offering a business-to-business entirely online auction market place platform
which is assessed by the Board as a separate operation and thus there are two
reportable segments: retail (Motorpoint) and wholesale (Auction4Cars).
Retail Retail Wholesale Wholesale Total Total
2024 2023 2024 2023 2024 2023
£m £m £m £m £m £m
Revenue 931.1 1,175.7 155.5 264.5 1,086.6 1,440.2
Cost of sales (866.8) (1,101.2) (146.7) (253.3) (1,013.5) (1,354.5)
Gross profit 64.3 74.5 8.8 11.2 73.1 85.7
3. Revenue recognition
Revenue represents amounts chargeable, net of value added tax, in respect of
the sale of goods and services to customers. Revenue is measured at the fair
value of the consideration receivable, when it can be reliably measured, and
the specified recognition criteria for the sales type has been met. The
transaction price is determined based on periodically reviewed prices and are
separately identified on the customer's invoice. There are no estimates of
variable consideration.
The transaction price for motor vehicles and motor related services is at fair
value as if each of those products are sold individually.
(i) Sales of motor vehicles
Revenue from the sale of retail motor vehicles is recognised when the control
has passed; that is, when the vehicle has been collected by, or delivered to,
the customer. Payment of the transaction price is due immediately when the
customer purchases the vehicle. Sales of accessories, such as mats, are
recognised in the same way.
Revenue from the sale of wholesale vehicles is recognised when the control has
passed; that is, when full payment has been made for the vehicle.
The Group operates a return policy which is consistent with the relevant
consumer protection regulations. This is offered in the form of a seven day
exchange guarantee to all retail customers and a 14 day money back guarantee
for home delivery customers.
(ii) Sales of motor related services and commissions
Motor related services sales include commissions on finance introductions,
extended guarantees and vehicle asset protection as well as the sale of paint
protection products. Sales of paint protection products are recognised when
the control has passed; that is, the protection has been applied and the
product is supplied to the customer.
Vehicle extended guarantees and asset protection ('GAP insurance') where the
Group is not contractually responsible for future claims, are accounted for by
recognising the commissions attributable to Motorpoint at the point of sale to
the customer.
Where the Group receives finance commission income, primarily arising when the
customer uses third-party finance to purchase the vehicle, the Group
recognises such income on an 'as earned' basis.
The assessment is based on whether the Group controls the specific goods and
services before transferring them to the end customer, rather than whether it
has exposure to significant risks and rewards associated with the sale of
goods or services.
2024 2023
£m £m
Revenue analysis
Revenue from sale of motor vehicles 1,037.5 1,370.7
Revenue from motor related services and commissions 45.9 62.6
Revenue recognised that was included in deferred income at the beginning of 0.2 3.9
the year - Sale of motor vehicles
Revenue recognised that was included in deferred income at the beginning of 3.0 3.0
the year - Motor related services and commissions
Total revenue 1,086.6 1,440.2
4. Operating profit / loss
Analysed as:
Operating profit / loss includes the effect of charging: 2024 2023
£m £m
Inventory recognised as expense 1,007.8 1,345.0
Movement in provision against inventory 0.2 (0.1)
Employee benefit expense 33.1 36.2
Depreciation of property, plant and equipment and right-of-use assets 8.8 9.0
Amortisation of intangible assets 1.1 0.4
Expense on short term and low value leases 0.4 0.4
Exceptional income (5.6) -
Exceptional costs 7.7 -
Total expenses before exceptional items comprise: 2024 2023
£m £m
Cost of sales 1,013.5 1,354.5
Operating expenses:
Selling and distribution expenses 19.4 23.5
Administrative expenses 53.5 55.7
Total operating expenses before exceptional items: 72.9 79.2
Total expenses before exceptional items 1,086.4 1,433.7
5. Exceptional items
2024 2023
£m £m
Restructuring costs 1.7 -
Asset write off 6.0 -
Insurance proceeds (5.6) -
Total exceptional items before finance expense and income tax 2.1 -
6. Earnings per share
Basic and diluted EPS are calculated by dividing the earnings attributable to
equity shareholders by the weighted average number of ordinary shares during
the year.
2024 2023
Loss attributable to ordinary shareholders (£m) (8.4) (0.6)
Weighted average number of ordinary shares in Issue ('000) 90,180 90,190
Basic EPS (pence) (9.3) (0.7)
Diluted weighted average number of ordinary shares in Issue ('000) 90,180 90,190
Diluted EPS (pence) (9.3) (0.7)
The difference between the basic and diluted weighted average number of shares
represents the dilutive effect of the currently operating schemes and the
vested but not yet exercised options. This is shown in the reconciliation
below. No dilution in FY24 due to the Group making a loss for the year.
There is a maximum of 1,440,453 additional options which have not been
included in the dilutive calculation in relation to these schemes.
2024 2023
Weighted average number of Ordinary Shares in Issue ('000) 90,180 90,190
Adjustment for share options ('000) - -
Weighted average number of Ordinary Shares for diluted earnings per share 90,180 90,190
('000)
7. Borrowings
During the year the Company renegotiated the terms of both its revolving
credit facility and stocking facilities, reducing available headroom from
£29.0m and £195.0m to £14.0m and £150.0m respectively. As at the reporting
date £Nil of the revolving credit facility (FY23: £Nil) and £Nil of the
overdraft (FY23: £Nil) was drawn down. The terms of the Revolving Credit
Facility and overdraft require a full repayment for a period of at least one
day or more in each financial year and half year with no less than one month
between repayments.
The finance charge for utilising the facility was dependent on the Group's
borrowing ratios as well as the base rate of interest in effect. During the
year ended 31 March 2024 interest was charged at 6.0% (FY23: 2.4%) per annum.
The interest charged for the year of £0.7m (FY23: £0.4m) has been expensed
as a finance cost.
8. Share capital
2024 2023
Number Amount Number Amount
'000 £m '000 £m
Allotted, called up and fully paid Ordinary Shares of 1p each
Balance at the beginning of the year 90,190 0.9 90,190 0.9
Bought back and held as treasury shares during the year (30) - - -
Released from treasury to satisfy employee share plan obligations - - - -
Bought back and cancelled during the year (190) - - -
Balance at the end of the year ((1)) 89,970 0.9 90,190 0.9
1 During the year 220,255 shares were purchased by the Company in
accordance with the terms of its share buyback programme, as announced on 26
January 2024. Of these, 190,001 were cancelled as at 31 March 2024. The shares
were acquired at an average price of 131.0p per share, with prices ranging
from 133.0p to 129.0p. In the period from 1 April 2024 to 31 May 2024 972,280
shares were purchased by the Company
The 190,001 shares bought back and cancelled represent 0.2% of the
issued Ordinary Shares, at a purchase cost of £0.3m.
There are currently 30,000 shares held in treasury which were cancelled post
year end. Shares are held on behalf of employees within the employee benefit
trust (EBT).
The Group does not have a limited amount of authorised capital.
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