TIDMMOTR
RNS Number : 7704X
Motorpoint Group plc
29 November 2017
29 November 2017
Motorpoint Group PLC
("Motorpoint", the "Company" or the "Group")
Interim Results
Motorpoint, the largest independent vehicle retailer in the UK,
today announces its unaudited interim results for the six months
ended 30 September 2017 (FY18 H1).
Financial highlights
-- Revenue increased 18% to GBP483.2m (FY17 H1: GBP408.9m)
-- Profit before taxation and exceptional items up 64% to GBP10.5m (FY17 H1: GBP6.4m)
-- Profit before taxation up 304% to GBP9.7m (FY17 H1: GBP2.4m)
-- Underlying earnings per share increased 62.3% to 8.6p (FY17 H1: 5.3p)
-- Cash flow from operations before exceptional items increased
to GBP20.5m (FY17 H1: GBP12.5m)
-- Cash flow from operations increased to GBP20.5m (FY17 H1: GBP6.3m)
-- Interim dividend declared of 2.0p (FY17 H1: 1.33p)
-- Share buy back programme for up to GBP10m of shares announced
Operational highlights
-- Opened 12(th) retail site in Sheffield in April 2017
-- Increase in repeat customers of 20.5%
-- Net Promoter Score performance of 77% (FY17 H1: 75%)
-- Group's stocking facilities extended by GBP5m to GBP70m in
September 2017 to support growth of the business
Mark Carpenter, Chief Executive Officer of Motorpoint Group PLC
commented:
"The Group has delivered a strong first half of the financial
year with significant increases across all KPIs. The new sites that
have opened in the last two years continue to deliver an improving
performance as they gain awareness in their local markets and
increase our share in the nearly new market.
"The second half has started well and the Group's resilient
business model and focus on delivering choice, value and service
leaves it ideally positioned to continue its market share growth of
nearly new car sales. Whilst market conditions are always subject
to external changes, the supply of stock coming into the business
remains good and management are comfortable with the Group's
trading performance so far in H2. The Board is therefore confident
of delivering full year results in line with market
expectations.
"The Group has separately announced today that it proposes to
begin a share buy back programme. This has been possible due to the
Group's robust balance sheet position and cash generative business
model."
A meeting for analysts will be held at 9:00am today at the
offices of FTI Consulting, 200 Aldersgate, London, EC1A 4HD.
Enquiries:
Motorpoint Group PLC via FTI Consulting
Mark Carpenter, Chief Executive
Officer
James Gilmour, Chief Financial
Officer
FTI Consulting (Financial PR)
Jonathon Brill
Alex Beagley
James Styles 020 3727 1000
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
Notes to editors
Motorpoint is the largest independent vehicle retailer in the
United Kingdom. The Group's principal business is the sale of
nearly-new vehicles, the majority of which are up to two years old
and which have covered less than 15,000 miles. Motorpoint sells
vehicles from brands representing over 95 per cent of new vehicle
sales in the United Kingdom, with models from Ford, Vauxhall,
Volkswagen, Nissan, Hyundai, Audi and BMW being amongst the top
sellers. The Group operates from 12 retail sites across the United
Kingdom; Derby, Burnley, Glasgow, Newport, Peterborough, Chingford,
Birmingham, Widnes, Birtley, Castleford, Oldbury and Sheffield of
which five have opened in the last three years; together with a
national contact-centre dealing with online enquiries.
More information is available at www.motorpointplc.com and
www.motorpoint.co.uk.
Cautionary Statement
This announcement contains unaudited information and
forward-looking statements that are based on current expectations
or beliefs, as well as assumptions about future events. These
forward looking statements can be identified by the fact that they
do not relate only to historical or current facts. Undue reliance
should not be placed on any such statements because they speak only
as at the date of this document and are subject to known and
unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and the Group's plans and
objectives, to differ materially from those expressed or implied in
the forward looking statements. Motorpoint undertakes no obligation
to revise or update any forward-looking statement contained within
this announcement, regardless of whether those statements are
affected as a result of new information, future events or
otherwise, save as required by law and regulations.
INTRODUCTION
Motorpoint is the largest independent vehicle retailer in the
United Kingdom. The Group's principal business is the sale of
nearly-new vehicles, the majority of which are up to two years old
and which have covered less than 15,000 miles. Motorpoint sells
vehicles from brands representing over 95% of new vehicle sales in
the United Kingdom, with models from Ford, Vauxhall, Volkswagen,
Nissan, Audi and BMW amongst the top sellers. The Group operates
from 12 retail sites across the country, of which five have opened
in the last three years, together with a national contact-centre
dealing with online enquiries.
In addition to sales of nearly-new vehicles, the Group also
operates Auction4Cars.com, a business to business online auction
platform for vehicles acquired through the Group's part-exchange
offering which do not qualify for retail sale as they are outside
of the Group's target vehicle age or mileage.
The Group also offers ancillary products to customers, including
customer finance packages, extended warranties, insurance products
and vehicle protection treatments.
Our vision today remains the same as when we first opened our
doors 19 years ago, to be the car buyers' champion, by offering
unrivalled choice, value and service.
FINANCIAL REVIEW
Motorpoint Group PLC was incorporated during April 2016, and in
May 2016 the Company obtained control of the entire share capital
of Motorpoint Limited via a share for share exchange. To ensure
that the most appropriate view of the Group's results is presented,
the comparative information disclosed in these Interim Results
reflects the continuation of the pre-existing Group headed by
Motorpoint Limited and has been prepared applying the principle of
predecessor accounting.
Set out below are the Key Performance Indicators for the
Group:
Group KPI 6 months 6 months Change
to 30 September to 30 September
2017 2016
------------------------------------- ----------------- ----------------- --------
Revenue GBP483.2m GBP408.9m +18.2%
------------------------------------- ----------------- ----------------- --------
Gross Margin GBP38.2m GBP28.8m +32.6%
------------------------------------- ----------------- ----------------- --------
Operating profit before exceptional
items GBP11.0m GBP7.0m +57.1%
------------------------------------- ----------------- ----------------- --------
Operating profit GBP10.2m GBP3.0m +240.0%
------------------------------------- ----------------- ----------------- --------
Gross Margin to adjusted operating
expenses(1) ratio 140% 132% +6.0%
------------------------------------- ----------------- ----------------- --------
Adjusted Profit Before Tax (2) GBP10.5m GBP6.4m +64.1%
------------------------------------- ----------------- ----------------- --------
Profit Before Tax GBP9.7m GBP2.4m +304.2%
------------------------------------- ----------------- ----------------- --------
Cash flow from operations GBP20.5m GBP6.3m +225.4%
------------------------------------- ----------------- ----------------- --------
Cash flow from operations before
exceptional items GBP20.5m GBP12.5m +64.0%
------------------------------------- ----------------- ----------------- --------
Cash flow from operations before
exceptional items conversion(3) 186% 179% +3.9%
------------------------------------- ----------------- ----------------- --------
Underlying Earnings per Share (p)
(4) 8.6 5.3 +62.3%
------------------------------------- ----------------- ----------------- --------
Number of sites 12 11 +9.1%
------------------------------------- ----------------- ----------------- --------
(1) Calculated as Gross Margin / (Operating expenses minus
Exceptional items)
(2) Profit before tax after adding back exceptional items.
(3) Calculated as Cash flow from operations before exceptional
items / operating Profit before exceptional items
(4) Calculated by dividing the earnings excluding exceptional
items attributable to equity shareholders by the number of ordinary
shares in issue at the reporting date.
During the six months ended 30 September 2017 the Group achieved
a strong trading performance, with revenue growth of 18.2% to
GBP483.2m and adjusted profit before tax of GBP10.5m, a 64.1%
improvement from the comparative period.
Revenue growth has predominantly been delivered through a
combination of growing our customer base and an ongoing increase in
the level of repeat customers. The Group has delivered more
normalised margin levels in the first half compared to the same
period last year, and we are encouraged by the breadth and quality
of stock on hand going into the second half of the year.
Two sites, Castleford and Oldbury, reached their first
anniversary in the period and are both delivering an encouraging
performance. Our 12(th) site opened in Sheffield in April and is
generating good sales momentum in its first year of trading.
The exceptional item of GBP0.8m relates to a charge for prior
years, for an anticipated VAT assessment on volume rebates from a
single supplier. The creation of this provision follows
correspondence received from HMRC post period end, and relates to
the rebates received over the last four years. Volume rebates from
this supplier are an area of specific focus for HMRC across the
industry.
The Group generated strong cash flow from operations before
exceptional items of GBP20.5m. This does reflect a seasonal
reduction in stock levels held at the end of the September period
as well as an increase of GBP5m in the stocking facilities which
are available to the business but the underlying improvement in
cash position evidences the strength of the cash generative model
that Motorpoint follows.
The increase to the stocking facilities which has been obtained
will enable the business to take advantage of the stock buying
opportunities anticipated for H2. As at 30 September 2017 the
Group's cash position was GBP21.4m which, including the Group's
banking facilities, provided headroom of GBP41.4m.
The Group's banking facilities include a GBP20m facility
provided by Santander UK PLC which was undrawn as at the reporting
date. As at 30 September 2017, the Group was supported by fully
utilised stocking facilities provided by Black Horse Limited of
GBP70m. This facility was extended by GBP5m in September 2017 as
described above.
OPERATIONAL REVIEW
Motorpoint's operations are delivered through its estate of
retail sites and its Motorpoint.co.uk and Auction4Cars.com
websites, supported by a dedicated contact centre. The Company's
strategy is threefold; (i) to grow in their local markets (ii) to
increase nationwide sales through the contact centre, and (iii) to
open new sites to continue the expansion to new markets around the
UK.
In the first half, the Group opened its latest retail site, in
Sheffield, South Yorkshire. This most recent opening grows the
estate to a total of 12 sites, of which a third have been launched
since November 2015. The latest three openings have bolstered the
Group's presence in Motorpoint's key brand heartlands, in the
Midlands and North. The ongoing expansion is part of our plan to
open at least 20 large retail sites across the UK in the medium
term.
The new site openings have delivered pleasing momentum as they
build towards maturity and are expected to perform in line with the
Group's pro-forma new site model. The Company's growth strategy
remains to open at least one new retail site per year, but will
remain flexible and opportunistic should additional prospects
arise.
Auction4cars.com, which is the dedicated disposal channel for
customer part-exchanges that do not fall into
Motorpoint's strict retail criteria, has continued to grow as
retail volume has increased. During October we opened the 8th
Auction 4 Cars collection location at the Sheffield site, this
location has already built a substantial trade customer base.
DIVID
The Group is declaring an interim dividend of 2.0p per share in
respect of FY18 (FY17: 1.33p). The interim dividend for FY18 will
be paid on 16 March 2018 for those shares recorded on 2 February
2018.
RECENT MARKET TRS
The latest SMMT data for October reported a continued decline in
new car registration numbers for calendar year 2017. YTD new car
registrations are now (4.6) % behind last year's record
performance, though used car transaction volume remains broadly
flat year on year. The new car registration figures are split
(6.4)% for private and (3.0)% for fleet.
The SMMT is continuing to project a full year drop in new car
registration numbers, continuing into 2018. This fall does not have
a direct correlation on the volumes of used car sales or used car
availability but we note the SMMT projection that used car sales
may begin to follow these new car trends which means we must ensure
we continue to take market share.
Motorpoint has seen good availability of stock during FY18 H1
which has continued into the early months of H2. The stock profile
has included the on-going availability of prestige models which has
continued broadly in line with the prior year.
There has been a noticeable shift in new car registrations away
from diesel models in favour of petrol and alternative-fuels. Our
business model allows us to be completely fuel agnostic, buying and
selling the most compelling product, such that our diesel sales
participation has grown marginally.
During the half we have seen relatively stable customer
penetration on finance products, including both PCP and HP. We
expect this to continue through the balance of the year.
OUR TEAM
The Motorpoint business model is underpinned by our Virtuous
Circle, a stakeholder engagement culture that starts with our
employees.
We champion employee engagement and believe that by ensuring our
values are part of our everyday activity across the business, we
will be successful in motivating and empowering our employees. This
in turn will result in continual improvement in the customer
experience that we deliver. Following consultation across the
business we relaunched our core values in October 2017 with the aim
of encapsulating our culture within four values. These values are;
being proud, supportive, honest and happy.
This culture runs throughout the business and is evidenced by
Motorpoint being named as one of The Sunday Times Top 100 Mid-Sized
Companies to Work For over the last three consecutive years.
To further improve team engagement we continue to offer a number
of share schemes including an annual Performance Share Plan for
senior staff, a Share Incentive Plan and an annual Sharesave
scheme.
OUR CUSTOMERS
The second part of the Virtuous Circle focuses on the customer
and our vision to be the car buyers' champion, by offering
unrivalled choice, value and service.
Our key measures of service are NPS (Net Promoter Score) and our
Feefo and Google ratings, and to ensure our level of customer
service is appropriate all commissions and bonus schemes throughout
the business are tied to customer satisfaction.
Metric 6 months to 12 months to 6 months to
30 September 2017 31 March 2017 30 September 2016
-------- ------------------- --------------- -------------------
NPS 77% 77% 75%
-------- ------------------- --------------- -------------------
Feefo 4.6/5 4.6/5 4.6/5
-------- ------------------- --------------- -------------------
Google 4.6/5 Not recorded Not recorded
-------- ------------------- --------------- -------------------
Our focus on customer service continues to be reflected in an
improved NPS and we delivered stable Feefo results in the six
months to 30 September 2017. We are continuing to focus on Google
reviews and believe our developing reputation on Google has helped
drive our revenue growth.
We believe our focus on the customer experience is evidenced by
the level of repeat and referral business we generate, measured as
a customer making a second purchase within a four year window. For
the six months ended 30 September 2017 these increased by
20.5%.
OUTLOOK
As the UK's largest independent vehicle retailer, management
believe that Motorpoint's resilient business model leaves it
ideally positioned to continue its market share growth of nearly
new car sales. Whilst we note the decrease in new car registrations
we believe that the associated decrease in consumer appetite will
make the value proposition we offer even more relevant.
The second half has started well notwithstanding that consumer
confidence continues to be reported as fragile. Market conditions
are always subject to external changes but the supply of stock
coming into the business remains good and management are
comfortable with the Group's trading performance in H2 so far. The
Board is therefore confident of delivering a full year result in
line with market expectations.
New sites opened in the last 2 years provide a sizeable
opportunity as they gain awareness in their local markets which
provides a platform for revenue and profit growth.
Our strategy remains on track and we believe our differentiated
proposition, strong employee and customer focus and industry
leading scale will allow us to deliver despite the more challenging
economic conditions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE FY18
INTERIM RESULTS
The Directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and that the interim
management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed consolidated
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related-party transactions in the first six months
and any material changes in the related-party transactions
described in the last annual report.
A list of current Directors and their biographies is maintained
on the Motorpoint Group PLC website www.motorpointplc.com
By order of the Board
Mark Carpenter James Gilmour
Chief Executive Officer Chief Financial Officer
28 November 2017 28 November 2017
Condensed Consolidated Income Statement
For the six months ended 30 September 2017
Unaudited Six Unaudited Six Months
Months ended 30 ended 30 September Audited Year ended
September 2017 2016 31 March 2017
Note GBPm GBPm GBPm
Revenue 5 483.2 408.9 822.0
Cost of sales (445.0) (380.1) (759.8)
-------------------- --------------------- ---------------------
Gross profit 38.2 28.8 62.2
Operating expenses (28.0) (25.8) (49.3)
-------------------- --------------------- ---------------------
Operating profit 10.2 3.0 12.9
------------------------------- ---- ------------ -------------------- --------------------- ---------------------
Operating profit before
exceptional items 11.0 7.0 16.9
Exceptional items 6 (0.8) (4.0) (4.0)
------------------------------- ---- ------------ -------------------- --------------------- ---------------------
Finance income 7 - 0.1 0.1
Finance costs 8 (0.5) (0.7) (1.3)
------------------------------- ---- ------------ -------------------- --------------------- ---------------------
Net finance costs (0.5) (0.6) (1.2)
------------------------------- ---- ------------ -------------------- --------------------- ---------------------
Profit before taxation 9.7 2.4 11.7
Taxation 9 (1.9) (1.1) (3.0)
-------------------- --------------------- ---------------------
Profit and total comprehensive
income for the period/year
attributable to equity holders of
the parent 7.8 1.3 8.7
-------------------- --------------------- ---------------------
Earnings per share
Basic 11 7.78p 1.30p 8.68p
Diluted 11 7.77p 1.30p 8.67p
-------------------- --------------------- ---------------------
Adjusted earnings per share
Basic 11 8.58p 5.29p 12.68p
Diluted 11 8.57p 5.29p 12.65p
-------------------- --------------------- ---------------------
The Company's activities all derive from continuing
operations.
The Company has no other comprehensive income. Total
comprehensive income for the period/year is equal to the profit for
the financial period/year and is all attributable to the
shareholders of the Company.
Condensed Consolidated Balance Sheet
As at 30 September 2017
30 September 2017 30 September 2016 31 March 2017 (audited)
(unaudited) (unaudited)
Note GBPm GBPm GBPm
ASSETS
Non-current assets
Property, plant and
equipment 12 5.5 7.2 5.4
Deferred tax asset 0.4 - 0.4
Total non-current assets 5.9 7.2 5.8
--------------------------- --------------------------- ------------------------
Current assets
Inventories 90.4 66.1 98.4
Trade and other
receivables 13 8.9 7.0 9.4
Cash and cash equivalents 21.4 6.5 7.3
---------------------------
Total current assets 120.7 79.6 115.1
--------------------------- --------------------------- ------------------------
TOTAL ASSETS 126.6 86.8 120.9
--------------------------- --------------------------- ------------------------
LIABILITIES
Current liabilities
Trade and other payables 14 (101.5) (71.6) (99.2)
Current tax liabilities (1.8) (0.6) (1.8)
--------------------------- --------------------------- ------------------------
Total current liabilities (103.3) (72.2) (101.0)
--------------------------- --------------------------- ------------------------
NET CURRENT ASSETS 17.4 7.4 14.1
Non-current liabilities
Trade and other payables 15 (3.4) (6.3) (5.2)
Total non-current
liabilities (3.4) (6.3) (5.2)
--------------------------- --------------------------- ------------------------
TOTAL LIABILITIES (106.7) (78.5) (106.2)
NET ASSETS 19.9 8.3 14.7
--------------------------- --------------------------- ------------------------
EQUITY
Share capital 1.0 1.0 1.0
Capital reorganisation
reserve (0.8) (0.8) (0.8)
Retained earnings 19.7 8.1 14.5
--------------------------- --------------------------- ------------------------
TOTAL EQUITY 19.9 8.3 14.7
--------------------------- --------------------------- ------------------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2017
Six Months Ended 30
September 2017 Capital Total equity
(Unaudited) Reorganisation
Share capital Retained earnings Reserve GBPm
Note GBPm GBPm GBPm
-------------- ------------------ ----------------------- ---------------
At 1 April 2017 1.0 14.5 (0.8) 14.7
Profit and total
comprehensive income for
the period - 7.8 - 7.8
IFRS 2 Share Based Payment - 0.3 - 0.3
FY17 Final Dividend 10 - (2.9) - (2.9)
At 30 September 2017 1.0 19.7 (0.8) 19.9
Six Months Ended 30
September 2016 Capital Total equity
(Unaudited) Reorganisation
Share capital Retained earnings Reserve GBPm
Note GBPm GBPm GBPm
-------------- ------------------ ----------------------- ---------------
At 1 April 2016 0.2 25.5 - 25.7
Profit and total
comprehensive income for
the period - 1.3 - 1.3
IFRS 2 Share Based Payment - 0.1 - 0.1
Issue of Share Capital 0.8 - (0.8) -
Dividends paid prior to
Group restructure 10 - (18.8) - (18.8)
At 30 September 2016 1.0 8.1 (0.8) 8.3
Year Ended 31 March
2017 (Audited) Capital Total equity
Reorganisation
Share capital Retained earnings Reserve GBPm
Note GBPm GBPm GBPm
-------------- ------------------ ----------------------- ---------------
At 1 April 2016 0.2 25.5 - 25.7
Profit and total
comprehensive income for
the period - 8.7 - 8.7
IFRS 2 Share Based Payment - 0.4 - 0.4
Issue of Share Capital 0.8 - (0.8) -
Dividends paid prior to
Group restructure - (18.8) - (18.8)
Interim Dividend 10 - (1.3) - (1.3)
At 31 March 2017 1.0 14.5 (0.8) 14.7
Condensed Consolidated Cash Flow Statement
For the six months ended 30 September 2017
Note Unaudited Six Months Unaudited Six Months Audited Year ended 31
ended 30 September 2017 ended 30 September 2016 March 2017
GBPm GBPm GBPm
Cash flows from operating
activities
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash generated from
operations before
exceptional items 16 20.5 12.5 13.6
Cash flows from
exceptional items 16 - (6.2) (6.2)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash generated from
operations 20.5 6.3 7.4
Interest paid (0.5) (0.6) (1.3)
Income tax paid (1.9) (1.1) (2.9)
-------------------------- -------------------------- --------------------------
Net cash generated from
operating activities 18.1 4.6 3.2
-------------------------- -------------------------- --------------------------
Cash flows from investing
activities
Purchases of property,
plant and equipment (0.7) (4.6) (6.9)
Proceeds from sale of
property, plant and
equipment - - 5.8
Interest received - 0.1 0.1
Transactions with related
parties (0.4) (0.8) (0.8)
Net cash (used in) / from
investing activities (1.1) (5.3) (1.8)
Cash flows from financing
activities
Pre IPO Dividends - (4.4) (4.4)
Post IPO Dividends (2.9) - (1.3)
-------------------------- -------------------------- --------------------------
Net cash used in financing
activities (2.9) (4.4) (5.7)
-------------------------- -------------------------- --------------------------
Net (decrease)/ increase
in cash and cash
equivalents 14.1 (5.1) (4.3)
Cash and cash equivalents
at the beginning of the
period 7.3 11.6 11.6
--------------------------
Cash and cash equivalents
at end of period 21.4 6.5 7.3
-------------------------- -------------------------- --------------------------
Net cash and cash
equivalents comprises:
Cash at bank 21.4 6.5 7.3
-------------------------- -------------------------- --------------------------
The notes form an integral part of these Condensed Consolidated
Interim Financial Statements.
NOTES TO THE SET OF FINANCIAL INFORMATION
1. Basis of Preparation
Motorpoint Group PLC ('the Company') is incorporated and
domiciled in the UK. The address of the registered office is
Chartwell Drive, West Meadows Industrial Estate, Derby, DE21 6BZ.
The Condensed Consolidated Interim Financial Statements of the
Company as at and for the six months ended 30 September 2017
comprise the Company and its subsidiaries, together referred to as
the "Group".
The Directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the interim financial statements. The Condensed
Consolidated Interim Financial Statements for the six months ended
30 September 2017 are unaudited but have been reviewed by the
auditors.
2. Statement of Compliance
These Condensed Consolidated Interim Financial Statements have
been prepared in accordance with International Accounting Standard
34 Interim Financial Reporting as adopted by the European Union.
The financial information included does not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006 ('the Act') and do not include all the information required
for full annual financial statements. Accordingly, they should be
read in conjunction with the Annual Report and Financial Statements
of Motorpoint Group PLC for the year ended 31 March 2017 which are
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union. These condensed
consolidated interim financial statements were approved by the
Board of Directors on 28 November 2017.
3. Significant Accounting Policies
The same accounting policies, presentation and methods of
computation which were followed in the preparation of the Annual
Report and Financial Statements for Motorpoint Group PLC for the
period ended 31 March 2017 have been applied to these Condensed
Consolidated Interim Financial Statements where applicable. The
accounting policies and details of new standards adopted in the
year ended 31 March 2017 are listed in the Motorpoint Group PLC
Annual Report and Financial Statements on pages 60-64. Furthermore,
at the date of authorisation of the half yearly financial report,
there are a number of standards and interpretations also listed on
page 60 of the Motorpoint Group PLC Annual Report and Financial
Statements which were in issue but not yet effective, as such these
have not been applied in these statements.
4. Comparative Figures
The comparative figures for the financial year ended 31 March
2017 are extracted from the Motorpoint Group PLC Annual Report and
Financial Statements for that financial year. The accounts have
been reported on by the Company's auditor and delivered to the
Registrar of Companies. The report of the auditor was (i)
unqualified (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498(2) or (3) of the Act.
The comparative figures for the six month period ended 30
September 2017 are as reported in the prior year and were prepared
in accordance with International Accounting Standard 34 Interim
Financial Reporting as adopted by the European Union.
5. Segment Reporting and Revenue
The Company's reportable operating segment is considered to be
the United Kingdom operations. The Company's chief operating
decision maker is considered to be the Board of Directors.
Revenue represents amounts chargeable, net of value added tax,
in respect of the sale of goods and services to customers. Revenue
is measured at the fair value of the consideration receivable, when
it can be reliably measured, and the specified recognition criteria
for the sales type have been met.
(a) Sales of motor vehicles
Revenue from sales of motor vehicles is recognised when the
vehicle has been collected by the customer and the risks and
rewards of ownership have passed.
(b) Sales of motor related services and Commissions
Motor related services sales include extended guarantees, paint
protection and vehicle asset protection. Sales of related services
excluding vehicle asset protection and vehicle extended guarantees
are recognised when the product is supplied to the customer.
Vehicle extended guarantees where the Group is contractually
responsible for future claims are accounted for by deferring the
guarantee income received, along with direct selling costs, and
then releasing the income on a straight line basis over the
remaining life of the guarantee. Costs in relation to servicing the
extended guarantee income are expensed to the income statement as
incurred.
Vehicle extended guarantees and asset protection (gap insurance)
where the Group is not contractually responsible for future claims,
are accounted for by recognising the commissions attributable to
Motorpoint at the point of sale to the customer. Where the Group
receives commission income, primarily arising when the customer
uses third-party finance to purchase the vehicle, the Group
recognises such income on an 'as earned' basis.
Six Months ended 30 Six Months ended 30
September 2017 September 2016 Year ended 31 March 2017
GBPm GBPm GBPm
Revenue from sale of motor
vehicles 459.9 393.0 789.0
Revenue from motor related
services and commissions 23.3 15.9 33.0
---------------------------- ----------------------------- --------------------------
Total Revenue 483.2 408.9 822.0
---------------------------- ----------------------------- --------------------------
6. Exceptional Items
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the Company. They are
material items of income or expense that have been shown separately
due to the significance of their nature and/or amount.
Six Months ended 30 Six Months ended 30
September 2017 September 2016 Year ended 31 March 2017
GBPm GBPm GBPm
IPO listing and professional
fees - 4.0 4.0
Potential VAT Liability 0.8 - -
---------------------------- ---------------------------- --------------------------
0.8 4.0 4.0
---------------------------- ---------------------------- --------------------------
The exceptional items in the six months ended 30 September 2017
of GBP0.8m relates to a charge for prior years, for an anticipated
VAT assessment on volume rebates from a single supplier. The
creation of this provision follows correspondence received from
HMRC post period end, and relates to the rebates received over the
last four years. Volume rebates from this supplier are an area of
specific focus for HMRC across the industry.
7. Finance Income
Six Months ended 30 Six Months ended 30
September 2017 September 2016 Year ended 31 March 2017
GBPm GBPm GBPm
---------------------------- ---------------------------- -------------------------
Other interest receivable on
amounts owed by related
parties - 0.1 0.1
--------------------------- ---------------------------- -------------------------
Total finance income - 0.1 0.1
=========================== ============================ =========================
8. Finance Cost
Six Months ended 30 Six Months ended 30
September 2017 September 2016 Year ended 31 March 2017
GBPm GBPm GBPm
Interest on bank borrowings - - 0.1
Interest on stocking finance
facilities 0.5 0.6 1.0
Other interest payable - 0.1 0.2
--------------------------- ---------------------------- --------------------------
Total finance costs 0.5 0.7 1.3
=========================== ============================ ==========================
9. Taxation
The tax charge for the period is provided at the effective rate
of 20% (FY17: 20% before non deductible IPO costs) representing the
best estimate of the average annual tax rate for the full year
profit.
10. Dividends
Six Months ended 30 September Six Months ended 30
2017 September 2016 Year ended 31 March 2017
GBPm GBPm GBPm
Pre IPO Dividend in specie - 14.4 14.4
Pre IPO Cash Dividends - 4.4 4.4
Post IPO Cash Dividends 2.9 - 1.3
------------------------------ ----------------------------- -------------------------
Total dividends 2.9 18.8 20.1
------------------------------ ----------------------------- -------------------------
11. Earnings per Share
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to equity shareholders by the weighted
average number of ordinary shares at the end of the period.
Adjusted earnings per share are calculated on the same basis but
adjusting earnings attributable to equity shareholders for
exceptional items.
Six Months ended 30 Six Months ended 30
September 2017 September 2016 Year ended 31 March 2017
Profit Attributable to
Ordinary Shareholders
(GBPm) 7.8 1.3 8.7
Exceptional Items (GBPm) 0.8 4.0 4.0
----------------------------- ----------------------------- -------------------------
Adjusted Profit Attributable
to Ordinary Shareholders
(GBPm) 8.6 5.3 12.7
----------------------------- ----------------------------- -------------------------
Weighted average number of
ordinary shares in Issue
('000) 100,194 100,194 100,194
----------------------------- ----------------------------- -------------------------
Earnings per share (pence) 7.78 1.30 8.68
----------------------------- ----------------------------- -------------------------
Adjusted Earnings per share
(pence) 8.58 5.29 12.68
----------------------------- ----------------------------- -------------------------
Diluted Number of Shares in
Issue ('000) 100,341 100,194 100,360
----------------------------- ----------------------------- -------------------------
Diluted Earnings per share
(pence) 7.77 1.30 8.67
----------------------------- ----------------------------- -------------------------
Adjusted Diluted Earnings
per share (pence) 8.57 5.29 12.65
----------------------------- ----------------------------- -------------------------
The difference between the basic and diluted weighted average
number of shares represents the dilutive effect of the SAYE scheme.
This is shown below.
The shares for the SIP scheme were purchased ahead of issue and
the PSP has performance criteria which have not been met so the
options are not yet dilutive.
Six Months ended 30 Six Months ended 30
September 2017 September 2016 Year ended 31 March 2017
Weighted average number of
ordinary shares in Issue
('000) 100,194 100,194 100,194
Adjustment for share options 147 - 166
Weighted average number of
ordinary shares for diluted
earnings per share 100,341 100,194 100,360
12. Property, plant and equipment
During the period ended 30 September 2016 the business acquired
the freehold land and property for a site at Oldbury. The cost of
GBP3.9m was capitalised. This property was subsequently sold and is
shown as both an acquisition and a disposal in the year ended 31
March 2017.
13. Trade and other receivables
30 September 2017 30 September 2016 31
March 2017
Due within one year GBPm GBPm GBPm
Trade receivables 4.3 2.2 2.6
Other receivables - 0.1 0.2
VAT recoverable - - 0.2
Prepayments 3.8 3.9 5.3
Accrued income 0.8 0.8 1.1
------------------ ------------------ ------------
8.9 7.0 9.4
------------------ ------------------ ------------
The Directors' assessment is that the fair value of trade and
other receivables is equal to the carrying value.
14. Trade and other payables due less than 1 year
30 September 2017 30 September 2016 31
March
2017
GBPm GBPm GBPm
Trade payables
* Trade creditors 11.0 5.8 18.8
70.0 53.0 64.9
* Stocking finance facilities
Other taxes and social security 0.7 0.6 0.7
Accruals 13.8 7.5 11.2
VAT Payable 2.6 1.7 -
Deferred extended guarantee income 3.4 2.6 3.2
Amounts due to related parties - 0.4 0.4
101.5 71.6 99.2
------------------ ------------------ -------
The Directors' assessment is that the fair value of trade and
other payables is equal to the carrying value.
15. Trade and other payables due over 1 year
30 September 2017 30 September 2016 31
March 2017
GBPm GBPm GBPm
Deferred extended guarantee income 3.4 6.3 5.2
3.4 6.3 5.2
------------------ ------------------ ------------
The Directors' assessment is that the fair value of trade and
other payables is equal to the carrying value.
16. Cash flow from operations
Six Months ended 30 Six Months ended 30 Year ended 31 March 2017
September 2017 GBPm September 2016 GBPm GBPm
Profit for the year,
attributable to equity
shareholders 7.8 1.3 8.7
Adjustments for:
Taxation charge 1.9 1.1 3.0
Finance income - (0.1) (0.1)
Finance costs 0.5 0.7 1.3
Operating profit 10.2 3.0 12.9
Share Based Compensation
Charge 0.3 0.1 0.4
Exceptional items charged
to operating profit 0.8 4.0 4.0
Depreciation charge 0.6 0.6 1.0
Cash flow from operations
before movements in
working capital and cash
flow on exceptional
items 11.9 7.7 18.3
Decrease (Increase) in
inventory 8.0 8.8 (23.5)
Decrease in trade and other
receivables 0.5 0.3 (2.0)
Increase (Decrease) in
trade and other payables 0.1 (4.3) 20.8
Cash flow from operations
before exceptional items 20.5 12.5 13.6
Payments in respect of
exceptional items - (6.2) (6.2)
---------------------------- ----------------------------
Cash generated from
operations 20.5 6.3 7.4
============================ ============================ ============================
Non-cash transactions
In the period to 30 September 2016 the Company declared
dividends in specie, which are disclosed in note 10.
17. Related Parties
During the period ended 30 September 2016 the vast majority of
related party balances were settled either through cash payments or
dividends in specie, this was completed ahead of the Group listing
on the London Stock Exchange and the clearance of these balances
was as outlined in the Motorpoint Group PLC prospectus.
During the period ended 30 September 2017 a payment of GBP0.4m
was made to Spring Rental meaning that at the 30 September 2017
there were no balances outstanding with related parties other than
rental agreements with Shoby Properties.
During the period ended 30 September 2017 rental payments
totaling GBP1.4m (FY17 H1: GBP1.5m) were due to Shoby Properties, a
related party, GBP0.5m of this was outstanding as at the 30
September 2017 (FY17 H1: GBPNil).
18. Risks and uncertainties
There are certain risk factors which could result in the actual
results of the Group differing materially from expected results.
These factors include: failure to deliver on choice, value and
service, a negative implication to the Motorpoint brand and
customer perception, inability to maintain relationships with
suppliers, fluctuation on exchange rate having an impact on vehicle
pricing, economic conditions impacting trading, market driven
fluctuations in vehicle values, litigation and regulatory risk,
failure of Group information and systems, availability of credit
and vehicle financing.
All other principal risks are consistent with those detailed in
the Motorpoint Group PLC Annual Report and Financial Statements.
The Board continually reviews the risk factors which could impact
on the Group achieving its expected results and confirm that the
above principal factors will remain relevant for the final six
months of the Financial Year ended 31 March 2018.
Independent review report to Motorpoint Group PLC
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Motorpoint Group PLC's condensed consolidated
interim financial statements (the "interim financial statements")
in the FY18 interim results of Motorpoint Group PLC for the 6 month
period ended 30 September 2017. Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the Condensed Consolidated Balance Sheet as at 30 September 2017;
-- the Condensed Consolidated Income Statement for the period then ended;
-- the Condensed Consolidated Cash Flow Statement for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the FY18 interim
results have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
As disclosed in note 2 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The FY18 interim results, including the interim financial
statements, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the FY18
interim results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the FY18 interim results based on our
review. This report, including the conclusion, has been prepared
for and only for the Company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the FY18 interim
results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
East Midlands
28 November 2017
a) The maintenance and integrity of the Motorpoint Group PLC
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the interim financial statements
since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QVLFLDFFZFBF
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