Motorpoint narrowed losses in the second quarter following a series of cost-cutting exercises, including job losses.
The online motor dealer told investors on Thursday that underlying pre-tax losses fell to around £600,000 in the three months to 30 September, from £3.1million in the first quarter.
Motorpoint boss Mark Carpenter cautioned that demand is still under severe pressure, but said action taken by the group has left it ‘positioned to emerge from this difficult macroeconomic cycle a leaner and more agile business’.
Cuts: Motorpoint slashed another 10% of its workforce in July
The group slashed another 10 per cent of its workforce in July after 134 job losses in 2022, as part of a package of measures expected to save around £3million a year.
Normalisaiton of trade in used cars after the pandemic boom, during which dealers like Motorpoint performed well, and mounting consumer pressures also led to a pause in store rollouts and cuts to discretionary capital spending.
The firm also opted to source a larger share of stock through direct supply channels and embraced data to determine the best sales prices.
Motorpoint said on Thursday: ‘Our right-sizing programme proved helpful to our performance in Q2 as these difficult macro conditions continued.
‘We anticipate used values will gradually align to historic levels as new car supply continues to improve which will further enhance affordability for our customers.’
It has led to an underlying operating profit of around £1.6million before interest expense of £5.3million for the first half, Motorpoint said, despite a one-off exceptional charge of £1million related to redundancy costs.
The group generated net cash from operations the first half and ended the period with net cash of £11million, up from £2.2million on 30 June.
Motorpoint expects to announce its interim results on 23 November.
Mr Carpenter said: ‘The impacts of high inflation, interest rates, and consumer uncertainty continue to affect demand for used cars.
‘We have responded by reducing our cost base and expanding our retail criteria to help customers find the car of their choice at a price they can afford.
‘We have successfully preserved cash while making progress on selective strategic initiatives, and are well positioned to emerge from this difficult macroeconomic cycle a leaner and more agile business, ready to seize the significant opportunity as market conditions improve.’
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