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Motorpoint's road to profit narrows

Tailwinds that sped growth of the UK's used car market have started to reverse
Motorpoint's road to profit narrows

Car dealers have had to shift through the gears since the pandemic hit. During the first half of 2020, they were forced to close for months on end and some “wouldn’t have survived without government assistance”, according to Ian McMahon, an automotive partner at accountancy firm UHY Hacker Young.

IC TIP: Sell at 195p
Tip style
Sell
Risk rating
High
Timescale
Short Term
Bull points
  • Margins and volumes under pressure
  • Omni-channel model offers some resilience
  • Deteriorating economic backdrop
Bear points
  • Used car prices retrenching
  • Consumer pressures likely to slow demand
  • Inventory availability remains light
  • Debt pile

Last year, however, the top 20 car dealership groups reported a jump in profits to £764mn, up from £105mn in the previous year, the accountancy firm said.

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