Motorpoint (MOTR) – a motor retailer specialising in 'nearly new' vehicles – released a far better set of half-year results compared with this time last year, enough to push the shares 5 per cent higher on the day. Revenues during the first half rose by nearly a fifth thanks to a similar rise in repeat business, while a 64 per cent rise in adjusted pre-tax profits to £10.5m was consistent with analysts' expectations. In the words of broker Numis, the numbers reflected “a convincing return to form” after the group reported a disappointing first-half performance this time last year. Bosses were forced to slash prices in the wake of the Brexit vote and the subsequent fall in the value of sterling.
As for the current health of the car market, chief executive officer Mark Carpenter said he hadn’t witnessed any severe drop-off in demand. In his view, there’s still sufficient headroom between the falling average price of a new car and the average residual value of the used vehicle such as Motorpoint sells. This was illustrated by a close to 90-basis point improvement in the gross margin to 7.9 per cent.
Analysts at Numis expect pre-tax profits of £20.6m for the year ending March 2018, giving EPS of 16.7p, compared with £15.7m and 12.6p in FY2017.
MOTORPOINT (MTR) | ||||
ORD PRICE: | 177p | MARKET VALUE: | £178m | |
TOUCH: | 175-181p | 12-MONTH HIGH: | 185p | LOW: 121p |
DIVIDEND YIELD: | 2.7% | PE RATIO: | 12 | |
NET ASSET VALUE: | 20p | NET CASH: | £21.4m |
Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2016 | 409 | 2.4 | 1.3 | 1.33 |
2017 | 483 | 9.7 | 7.8 | 2.00 |
% change | +18 | +304 | +498 | +50 |
Ex-div: | 1 Feb | |||
Payment: | 16 Mar |