Used car dealer Motorpoint has announced it is getting rid of one-in-10 of its staff. The Derby-based motor retailer – which made a small loss last year – said the move would save it around £3 million a year.
The business is a big online seller of cars and vans and has around 20 dealerships around the Ƶ. Revenues were up 9 per cent to £1.44 billion in the year to March 31, but pre-tax profits fell from £21.5 million to losses of £300,000.
The losses were put down to rising financing costs, limited stock availability and a fall in the value of electric vehicles. The business also invested £6.1 million into various “strategic objectives”.
In a trading update Motorpoint said difficult trading conditions last winter and spring had hampered growth and profitability, leading the business to focus on increasing its margins and reducing its cost base.
The business said it was cutting costs through things such as securing more stock through “direct supply channels” rather than at auction (which saves on auction fees), pausing the roll-out of new stores, cutting capital investment and cutting its headcount.
In a statement the business said: “As previously communicated, the impacts of high inflation, rising interest rates, and consumer uncertainty continue to affect demand for used cars.
“However, like others in the industry, we are encouraged by the growing number of vehicle supply options which, coupled with our increased use of data to determine optimum selling prices, has resulted in an improvement in retail margin.
“This will, in part, be tempered by lower finance commission as consumer uptake for finance reduces due to increased APR rates.
“The group has also focused on the costs of the business to ensure they are aligned with current market activity and, utilising the investment in technology to date, we are able to maintain a lower headcount as we conserve cash and return to profitability, whilst ensuring we are ready to invest for growth as more favourable market conditions return.
“The group continues to be confident it will emerge in a normalised market as a leaner and more valuable business ready to seize a significant opportunity.”
