Motorpoint backs full-year expectations, announces share buyback
By Michele Maatouk
Date: Tuesday 08 Oct 2019
(Sharecast News) - Vehicle retailer Motorpoint backed its full-year expectations on Tuesday as it reported a small uptick in revenue for the first half and announced a share buyback programme of up to £10m.
In an update ahead of its results for the half to 30 September, the company said it expects to post a 1% increase in revenue compared to the same period a year ago. It said this is "a significant outperformance" of the nearly-new car market and represents a "material" increase in market share.
"As has been well-documented across the sector, there was unusually high pressure on car margins over the early summer months. This pressure has now abated, and Motorpoint's gross margin for the first half is expected to be broadly in line with the prior year," it said.
Meanwhile, overheads for the period are expected to be around £2m higher than last year, although half of this cost is non-recurring.
Motorpoint said it continues to closely monitor consumer confidence in light of ongoing economic and political uncertainty but remains confident that recent trading and its "strong" current stock profile leave the group well placed to continue to increase market share while management evaluates further potential new site opportunities.
"As a result, the board remains comfortable with its full-year expectations," it said.
The company also announced a buyback programme of up to £10m, which it said reflects its continued strong cash generation.
House broker Shore Capital said the update confirms a "relatively resilient" performance and that it is "encouraged" by the broadly in line margins.
At 1000 BST, the shares were up 1.4% at 220p.
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