Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Car retailer Motorpoint warns on profits as sale prices drop

(Sharecast News) - Nearly new-car retailer Motorpoint issued a profit warning on Friday on the back of drops in used car values and reduced selling prices in the third quarter, as the company unveiled plans to buy back up to £5m of shares. While conditions are said to have "stabilised" in January, profitability in the three months to 31 December was hit by sharp downward used car price adjustments, with the average selling price dropping from £19,750 at the start of the financial year (1 April 2023) to just £14,500 currently.

As a result of the drop in prices, along with the timing of a seasonal increase in stock and disruption caused by Motorpoint's Derby store having to close in response to flooding, profitability for the year ending 31 March is now likely to be £5m to £6m below expectations.

"Whilst these falls had a significant negative impact on profitability, along with a reduction in finance commission, the group is optimistic for FY25 as the used car market continues to normalise," the company said in a statement.

"Encouragingly, retail volumes improved through Q3 and ended the calendar year roughly consistent with the previous year, reversing the trend of H1. This momentum has continued into Q4 and volumes are growing year on year."

The company also announced that it will shortly start a share buyback programme of no more than £5m, which it said was an "attractive use of the company's resources and beneficial for all shareholders".

Share this article

Related Sharecast Articles

Billionaire Issa nearing deal to sell Asda stake to TDR Capital - report
(Sharecast News) - US private equity firm TDR Capital is reportedly closing in on a deal to buy petrol station billionaire Zuber Issa's stake in supermarket chain Asda.
Billionaire Issa nearing deal to sell Asda stake to TDR Capital
(Sharecast News) - Private equity firm TDR Capital is reportedly closing in on a deal to buy petrol station billionaire Zuber Issa's stake in supermarket chain Asda.
DS Smith tumbles as Mondi abandons pursuit
(Sharecast News) - DS Smith tanked on Friday after Mondi said it would not be making an offer for the rival packaging group, clearing the path for a takeover by International Paper.
Eqtec agrees amendment to Verde subscription
(Sharecast News) - Waste-to-energy technology developer Eqtec updated the market on the Verde Corporation subscription on Friday, confirming that an amendment to the subscription letter had been agreed upon with Verde.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.