LONDON (ShareCast) - (Sharecast News) - Motorpoint reported a rise in interim profits on Thursday, after pent-up demand and a surge in online sales helped offset trading losses incurred during the first national lockdown.

The nearly-new car dealership said revenues in the six months to 30 September fell 27.4% to £387.7m, after all of its 13 branches were closed between April and June.

Operating expenses decreased 16%, however, and earnings before interest tax, depreciation and amortisation rose 4.5% to £14.0m. Pre-tax profits were head 3.2% at £9.7m.

Motorpoint attributed the rise in profits to strong trading throughout June and July, when its branches reopened, and bumper online sales.

Mark Carpenter, chief executive, said the firm saw "substantial trading losses" in April and May because of the branch closures.

But the firm upped investment in its digital offering, including a free home delivery service and a contactless reserve and collect option for the majority of customers who still wanted to view their car before completing the purchase. As a result, online sales growth outpaced branch sales growth in the remainder of the first half, reaching 43% of sales in the second quarter, a volume increase of 39%.

Looking ahead, Carpenter said: "Notwithstanding the challenging macroeconomic backdrop, we look to the future with confidence as we continue to innovate and build on the strengths of our low-cost, independent, flexible operating model and leading brand to drive further market share growth."

Darren Shirley, analyst at house broker Shore Capital, called the results "encouraging".

"The outlook is clouded by the ongoing lockdown 2.0, in its various guises, and the potential for extended localised lockdowns, which leaves the sales and margin outcome uncertain," he said.

"That said, Motorpoint's balance sheet is strong, providing considerable security for the future. We believe Motorpoint's combination of close to customer physical lcoations and a fully-operational digital capability is compelling."

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