Data from the Society of Motor Manufacturers and Traders show used car sales have been falling since the first quarter of 2017. While it’s true that the decline seems to be stabilising – the latest update showed a dip of just 0.6 per cent in the first quarter of 2019 – it still makes for an unappealing backdrop. In light of this, Motorpoint’s (MOTR) performance for the year to March looks all the more impressive. The group saw sales grow 6.8 per cent, while adjusted EPS rose 11.3 per cent to 18.7p.
Operating cash conversion increased by four percentage points to 99 per cent, allowing the share buyback programme to continue in spite of investments in a new preparation centre in Peterborough and the acquisition of the group’s 13th retail site. The site is in Swansea, and once it is opened will mean 47 per cent of UK households will be within a 45 minute drive of one of its sites.
The group increased stock levels by 11.7 per cent to £116.2m to take advantage of deals at the year-end and bolster its range at existing sites. However, a broad range of stock in the wider market led gross margins to fall 20 basis points to 7.5 per cent.
Broker Numis is forecasting adjusted EPS of 20.1p this year, up from 18.7p in 2019.
| MOTORPOINT (MOTR) | ||||
| ORD PRICE: | 213p | MARKET VALUE: | £203m | |
| TOUCH: | 212-216p | 12-MONTH HIGH: | 268p | LOW: 170p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 30p | NET CASH: | £13.8m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 0.56 | 7.7 | na | na |
| 2016 | 0.73 | 16.9 | 13.4 | nil |
| 2017 | 0.82 | 11.7 | 12.7 | 4.2 |
| 2018 | 0.99 | 20.0 | 16.0 | 6.6 |
| 2019 | 1.06 | 22.9 | 18.7 | 7.5 |
| % change | +7 | +15 | +17 | +14 |
| Ex-div: | 15 Aug | |||
| Payment: | 20 Sep | |||
