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magazineMotorpoint shares slump as profit wiped out amid a multitude of factors
Shares in second-hand car seller Motorpoint (MOTR) have fallen over 30% in the past six months to trade around the 102p mark – a far cry from the 385p level at which it traded just two years ago.
On 14 June, Motorpoint reported a pre-tax loss for the year ending 31 March 2023 of £0.3 million compared to a pre-tax profit of £21.5 million in the previous year.
Although its share of the nearly-new car market increased to 3.5% from 3.1% a year earlier, and its e-commerce revenue grew 5.7% to £660 million, the company said ‘the UK’s difficult macroeconomic conditions’ had a ‘knock-on effect’ for the used car market, and the company’s profitability.
The hikes in UK interest rates translated to lower finance commissions as affordability became more of an issue for customers, and they also resulted in a doubling of interest expenses to £7.1 million for Motorpoint.
The company also blamed the loss-making year on a decline in electric vehicle prices.
Analysts at Numis cut Motorpoint’s earnings forecast for 2024 from a £2 million profit to a £3 million loss.
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