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Motorpoint seals good first half

The motor retailer is holding its own in a challenging market
November 29, 2018

House broker Shore Capital credited "nearly new" car retailer Motorpoint (MOTR) for "keeping the motor running" despite a "volatile and challenging UK consumer backdrop" during the first half of its financial year. Total sales increased by 9.4 per cent, with tight cost control driving adjusted operating profit growth of 15.5 per cent to £12.7m. Meanwhile, adjusted pre-tax profits jumped by 13 per cent to £11.9m, against Shore Capital’s own forecast of £11.6m.

IC TIP: Buy at 216p

The group has also chosen to extend its share buyback programme, which it says reflects strong cash generation and limited volumes on its last string of buybacks. That said, cash-flow conversion did fall from 201 per cent to 118 per cent after a reduction in stock drove payables down by £10.7m. Chief financial officer James Gilmour said that while this didn’t affect the group’s eventual stock balance – which rose 3 per cent to £2.8m – headroom on stocking facilities did improve from £0.1m this time last year to close to £25m. Along with slightly higher capital expenditure and costs associated with the share buyback, net cash fell back slightly from the year-end position of £15.6m.

House broker Shore Capital expects pre-tax profits of £22.9m for the year ending March 2019, giving EPS of 18.7p, compared with £20.8m and 16.8p in FY2018.

MOTORPOINT (MOTR)   
ORD PRICE:216pMARKET VALUE:£ =210m
TOUCH:216-217p12-MONTH HIGH:268pLOW: 177p
DIVIDEND YIELD:3.3%PE RATIO:12
NET ASSET VALUE:26pNET CASH:£14.9m
Half-year to 30 JuneTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20174839.77.82.0
201852911.99.62.5
% change+9+23+23+25
Ex-div:7 Feb   
Payment:15 Mar