TIDMMOTR
RNS Number : 4487Q
Motorpoint Group plc
29 November 2016
CORRECTION: Interim Results
This announcement replaces the 'Interim Results' announcement
4287Q released at 10:22 on 29 November 2016. The paragraph under
'Dividend' now reads "The Group is declaring an interim dividend of
1.33p per share in respect of FY2017. The interim dividend for 2016
will be paid on the 17(th) March 2017 for those shares recorded on
17(th) February 2017."
29 November 2016
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 2016 (H1 Financial Year 2017).
Financial highlights
-- Revenue increased 11.5% to GBP408.9m (2016 H1: GBP366.8m)
-- Operating profit before exceptional items down 32% to GBP7.0m (2016 H1: GBP10.3m)
-- Exceptional costs of GBP4.0m (2016 H1: GBPNil) relating to IPO expenses
-- Profit before taxation and after exceptional items of GBP2.4m (2016 H1: GBP10.2m)
-- Underlying earnings per share of 5.29p (2016 H1: 8.00p)
-- Cash flow from operations before exceptional items increased to GBP12.5m (2016 H1: GBP8.0m)
-- Maiden interim dividend of 1.33p (2016 H1: GBPNil)
Operational highlights
-- Opened 10(th) retail site in Castleford in April 2016 and
11(th) retail site, in Oldbury, in July 2016
-- Significant increase in repeat customers to 5,488 (2016 H1: 4,698)
-- Net Promoter Score performance improved at every site in H1
2017 with a group average of 75%
-- Completed Initial Public Offering on the London Stock Exchange on 18 May 2016
-- Post period end, lease signed on the 12(th) retail site in
Sheffield (former car supermarket) which complements current
presence in Yorkshire
Mark Carpenter, Chief Executive Officer of Motorpoint Group plc
commented:
"The uncertainty around the result of the EU referendum
contributed to the Group's disappointing performance in the first
half; however we managed stock levels carefully thereby maintaining
our industry leading stock turn despite the short term impact on
margins. Whilst some uncertainty around Brexit remains, the three
new sites that we have opened in the last 12 months are performing
well and we anticipate they will deliver a solid performance in the
second half.
"Despite the softening in consumer confidence, market conditions
since the period end have remained stable with a good level of
stock availability and margins have returned to normal levels. We
continue to invest in opening new sites, and we have recently
acquired a leasehold site in Sheffield which will open in Spring
2017. The Group's differentiated proposition, strong employee and
customer focus and industry leading scale leave us well positioned
to deliver a full year performance in line with expectations. I
feel that the Company's dedication to offering choice, value and
service will ensure that Motorpoint remains the Car Buyers'
Champion."
A meeting for analysts will be held at 9:30am 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
Fiona Walker 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 11 retail sites across the United
Kingdom; Derby, Burnley, Glasgow, Newport, Peterborough, Chingford,
Birmingham, Widnes, Birtley, Castleford and Oldbury, of which six
have opened in the last five 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 11 retail sites across the country, of which six have opened
in the last four 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 older
than the Group's target vehicle age or have a mileage in excess of
the target vehicle mileage.
The Group also offers ancillary products to customers, including
customer finance packages, vehicle guarantees, insurance products
and vehicle protection treatments.
Our vision today remains the same as when we first opened our
doors 18 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 current period and comparative information disclosed in these
Interim Results reflect the continuation of the pre-existing group
headed by Motorpoint Limited and have been prepared applying the
principle of predecessor accounting. Further information on the
basis of preparation is given in Note 1.
The Company achieved double-digit revenue growth and increased
gross profit for the first six months of the year. The period was
impacted by our decision to hold a lower stock level over the
summer months, to reduce the level of asset risk in the face of
anticipated low consumer confidence following the EU referendum
result. In addition we incurred investment costs opening and
establishing the new sites in Birtley (H2 2016), Castleford and
Oldbury (H1 2017). These three locations together represent the new
sites opened in the last 12 months.
Group KPI 6 months 6 months Change
to 30 to 30
September September
2016 2015
------------------------------ ----------- ----------- -------
Revenue GBP408.9m GBP366.8m 11.5%
------------------------------ ----------- ----------- -------
Gross Margin GBP28.8m GBP28.2m 2.1%
------------------------------ ----------- ----------- -------
Operating profit before
exceptional items GBP7.0m GBP10.3m (32%)
------------------------------ ----------- ----------- -------
Gross Margin to adjusted
operating expenses(1) ratio 132% 158% (26%)
------------------------------ ----------- ----------- -------
Profit Before Tax GBP2.4m GBP10.2m (77%)
------------------------------ ----------- ----------- -------
Cash flow from operations
before exceptional items GBP12.5m GBP8.0m 56%
------------------------------ ----------- ----------- -------
Cash flow from operations
before exceptional items
conversion(2) 179% 78% 101%
------------------------------ ----------- ----------- -------
Underlying Earnings per
Share (p) (3) 5.29 8.00 (34%)
------------------------------ ----------- ----------- -------
Number of sites 11 8 38%
------------------------------ ----------- ----------- -------
(1) Calculated as Gross Margin / (Operating expenses minus
Exceptional items)
(2) Calculated as Cash flow from operations before exceptional
items / Operating Profit before exceptional items
(3) Calculated by dividing the earnings excluding exceptional
items attributable to equity shareholders by the number of ordinary
shares in issue at the reporting date.
The exceptional items of GBP4.0m relate to the costs involved in
the Motorpoint Group plc listing on the London Stock Exchange in
May 2016.
The Company's cash flow from operations before exceptional items
continues to show a positive performance, although it does reflect
the stock levels per site at the reporting date being below those
usually held at this time of the year, and these lower stock levels
are a result of our decision to reduce investment in new stock over
the early to mid summer period.
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 2016, the Group was also supported by
stocking facilities provided by Black Horse Limited of GBP60m for
the purchase of vehicle stock, of which circa GBP7m was undrawn.
The facility was extended by a further GBP5m in November 2016 to
support growth of the business and the future opening of the
Group's 12(th) site at Sheffield. Further information on available
facilities can be found in the Motorpoint Group plc prospectus.
As at 30 September 2016, there was only one related party
balance outstanding of GBP0.4m owing to Spring Rental Ltd for a
legacy agreement. Other balances which were outstanding as at 30
September 2015 and as at 31 March 2016 were cleared at or around
the time of the IPO. The only ongoing related party transactions
are for rents of retail sites payable to Shoby Properties Ltd. For
further information see note 17.
DIVID
The Group is declaring an interim dividend of 1.33p per share in
respect of FY2017. The interim dividend for 2016 will be paid on
the 17(th) March 2017 for those shares recorded on 17(th) February
2017.
OPERATIONAL REVIEW
The Company operates through its 11 retail sites and its
website, both of which are supported by a dedicated contact centre.
The Company's strategy is to grow the existing sites, increase
sales through the contact centre, and open new sites to extend the
geographic footprint to new markets around the UK.
In the last 12 months, the Group has invested heavily in new
site expansion, with three strategically-located new sites being
launched since November 2015; two of which, Castleford and Oldbury,
opened in the period. This targeted investment has taken the
percentage of UK population within a 30-minute drive time of one of
our sites to 24%, and is part of our strategy to open at least 20
large retail sites across the UK. Given the more challenging
trading conditions encountered in the last six months, we will
invest a higher level of marketing support than originally proposed
to embed these sites into their local markets in the forthcoming
year.
Planning, launching and supporting so many new sites in a
relatively short period of time required significant investment
from both management and employees. Whilst the impact of each new
site opening diminishes as a proportion of our total estate, we do
not anticipate opening as many new sites at this rate in the coming
year. The Company's growth strategy remains to open at least one
new retail site per year for the medium term, but will remain
opportunistic if further prospects arise.
As part of our vision to be the car buyers' champion, we have
invested in our customer finance offering, spanning both Hire
Purchase and Personal Contract Purchase products. From 1 October
2016, we have, supported by our finance partners, reduced the
typical APR charged on new finance deals. With increased visibility
for our newly improved offering, we anticipate the cost of this
investment to be substantially offset by increased customer
take-up. The increased visibility is delivered by way of new
monthly-cost search functionality on our website, and increased
prominence on other customer communications such as email.
RECENT MARKET TRS
Immediately prior to the UK's EU referendum vote in June 2016,
the Group witnessed a slowdown in enquiry rates from customers as a
result of reduced consumer confidence at that time, which was
supported by wider market data. As a result, we took the decision
to reduce our total level of inventory in the business, to minimise
stock risk in the face of this weakening confidence. Cars represent
a significant purchase for most consumers and whilst general
customer confidence surveys were positive, we believe some caution
over larger commitments persists notwithstanding the resilient
levels of consumer confidence that returned through the summer. Our
focus on providing nearly new cars at market-leading prices is even
more relevant to customers within this cautious environment, and
our compelling business proposition is well placed to take
market-share.
The new car market has seen record registration levels over the
six months to September 2016, with total registration numbers up
1.2% compared to the same period in the prior year. However this
total picture can be split into fleet sales (up 6.5% over the same
period), and private sales (down 2.9%). The majority of our stock
is sourced from these fleet sales, thus recent new car sales trends
give an encouraging upcoming pipeline for new Motorpoint stock.
The last 12 months have seen the growth in market share of some
of the key prestige marques, such as BMW and Mercedes-Benz. This
change has flowed into the Motorpoint stock profile, with more
prestige vehicles being bought, displayed and sold than in recent
years. Whilst this new profile of stock allows Motorpoint to appeal
to a wider audience and approach new customers, the lead-time in
tailoring our marketing message to these customers has impacted
stock days for these prestige vehicles for the period ended 30
September 2016.
PEOPLE
The Motorpoint business model is centred on the Virtuous Circle,
a stakeholder engagement culture that starts with our employees. We
champion this culture throughout the business, and have seen the
results evidenced by Motorpoint being named one of the Top 10 Best
Performing Mid-Sized Companies in The Sunday Times Top Track 250
(2016) as well as one of The Sunday Times Top 100 Mid-Sized
Companies to Work For over the last two consecutive years.
In June 2016 we ran our bi-annual Team Member Commitments
survey, which showed our highest-ever level of team engagement. We
believe that this engagement will help to deliver outstanding
customer service led by motivated employees who have a deep
understanding of the brand and feel part of Motorpoint's
future.
Following the Group's listing on the London Stock Exchange, we
have launched two employee share schemes - the first is a Share
Incentive Plan which delivered GBP1,000 of Motorpoint shares to all
eligible employees, and the second is a Performance Share Plan for
senior staff. We also plan to launch a SAYE scheme later in the
Financial Year to give all members of staff another opportunity to
share in Motorpoint's future success and engage them further with
the Company's vision.
Post the period end, on 21 October 2016, Mary McNamara was
appointed by the Board as the Group's Senior Independent
Non-Executive Director.
CUSTOMER EXPERIENCE
The second part of the Virtuous Circle focuses on the customer
and our vision to remain the car buyers' champion by offering
unrivalled choice, value and service.
Our key measures of service are NPS (Net Promoter Score) and our
Feefo rating, 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 6 months to 6 months to
30 September 31 March 2016 30 September
2016 2015
-------- -------------- --------------- --------------
NPS 75% 74% 68%
-------- -------------- --------------- --------------
Feefo 4.6/5 4.7/5 4.6/5
-------- -------------- --------------- --------------
The business focus on customer service continues to be reflected
in improved NPS and stable Feefo results in the six months to 30
September 2016.
We believe our focus on the customer experience is evidenced by
the numbers of repeat customers, measured as a customer making a
second purchase within a four year window. For the six months ended
30 September 2016 these increased to 5,488 from 4,698 for the six
months ended 30 September 2015.
POST REPORTING DATE ACTIVITIES
On 7 November 2016 the Group signed a lease for a retail site in
Sheffield. The site is a former car supermarket site which in the
short term will be used to store and prepare cars until works are
completed to open as a retail location early in Spring 2017. There
is strong brand awareness in the area as Motorpoint sponsored the
Sheffield Arena for five years and management believe the new site
will strengthen the Company's current presence in Yorkshire.
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.
The three new sites opened in the last 12 months provide a
sizeable opportunity as they gain awareness in their local markets.
Due to the challenging customer environment over the last six
months, the Company will invest in further marketing support to
these new sites than had previously been planned; with an
incremental spend per site of circa GBP0.5m over the 12 months to
30 September 2017.
The second half has started well notwithstanding that consumer
confidence remains fragile. Market conditions remain stable if
challenging and stock availability remains good (driven by strong
new car sales during the first half), and as a result trading since
the period end is in line with our expectations and margins have
returned to normal levels. We continue to invest in opening new
sites, having opened three sites in the past twelve months, and we
have acquired a leasehold site in Sheffield which will open in
Spring 2017. Our strategy remains on track and with our
differentiated proposition, strong employee and customer focus and
industry leading scale we are on track to deliver a full year
performance in line with expectations. The Company's dedication to
offering choice, value and service will ensure that Motorpoint
remains the Car Buyers' Champion.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
FY2017 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 2016 28 November 2016
Condensed Consolidated Statement of Financial Performance
For the six months ended 30 September 2016
Unaudited Six Months Unaudited Six Months
ended 30 September ended 30 September Audited Year ended 31
2016 2015 March 2016
Note GBPm GBPm GBPm
Revenue 5 408.9 366.8 729.2
Cost of sales (380.1) (338.6) (673.5)
----------------------- ----------------------- -----------------------
Gross profit 28.8 28.2 55.7
Operating expenses (25.8) (17.9) (38.4)
----------------------- ----------------------- -----------------------
Operating profit 3.0 10.3 17.3
-------------------------- --- ----- ----------------------- ----------------------- -----------------------
Operating profit before
exceptional items 7.0 10.3 18.6
Exceptional items 6 (4.0) - (1.3)
-------------------------- --- ----- ----------------------- ----------------------- -----------------------
Finance income 7 0.1 0.3 0.5
Finance costs 8 (0.7) (0.4) (0.9)
-------------------------- --- ----- ----------------------- ----------------------- -----------------------
Net finance costs (0.6) (0.1) (0.4)
-------------------------- --- ----- ----------------------- ----------------------- -----------------------
Profit before taxation 2.4 10.2 16.9
Taxation 9 (1.1) (2.2) (3.5)
----------------------- ----------------------- -----------------------
Profit and total
comprehensive
income for the period/
year 1.3 8.0 13.4
----------------------- ----------------------- -----------------------
Basic and diluted earnings
pence per share 11 1.30 8.00 13.40
----------------------- ----------------------- -----------------------
Underlying Basic and
diluted earnings pence
per share 11 5.29 8.00 14.70
----------------------- ----------------------- -----------------------
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 Statement of Changes in Equity
For the six months ended 30 September 2016
Six Months Ended 30 September
2016 (Unaudited) Share capital Retained earnings Reorg Reserve Total equity
Note GBPm 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
---------------------------------- ----- -------------- ------------------ ---------------- ---------------
Dividends 10 - (18.8) - (18.8)
---------------------------------- ----- -------------- ------------------ ---------------- ---------------
Other 0.8 (0.8) -
---------------------------------- ----- -------------- ------------------ ---------------- ---------------
Share Based Payment - 0.1 - 0.1
---------------------------------- ----- -------------- ------------------ ---------------- ---------------
At 30 September 2016 1.0 8.1 (0.8) 8.3
---------------------------------- ----- -------------- ------------------ ---------------- ---------------
Six Months Ended 30 September 2015 (Unaudited)
Share capital Retained earnings Total equity
GBPm GBPm GBPm
-------------- ------------------ ---------------
At 1 April 2015 0.2 24.6 24.8
Profit and total comprehensive income for the period - 8.0 8.0
At 30 September 2015 0.2 32.6 32.8
Year Ended 31 March 2016 (Audited)
Share capital Retained earnings Total equity
GBPm GBPm GBPm
-------------- ------------------ ---------------
At 1 April 2015 0.2 24.6 24.8
Profit and total comprehensive income for the period - 13.4 13.4
Dividends 10 - (12.5) (12.5)
At 31 March 2016 0.2 25.5 25.7
Condensed Consolidated Statement of Financial Position
As at 30 September 2016
30 September 2016 30 September 2015 31 March 2016 (audited)
(unaudited) (unaudited)
Note GBPm GBPm GBPm
ASSETS
Non-current assets
Property, plant and
equipment 12 7.2 3.0 3.2
Total non-current assets 7.2 3.0 3.2
------------------------- ------------------------- ------------------------
Current assets
Inventories 66.1 59.4 74.9
Trade and other
receivables 13 7.0 27.0 21.5
Cash and cash
equivalents 6.5 7.7 11.6
-------------------------
Total current assets 79.6 94.1 108.0
------------------------- ------------------------- ------------------------
TOTAL ASSETS 86.8 97.1 111.2
------------------------- ------------------------- ------------------------
LIABILITIES
Current liabilities
Trade and other payables 14 (71.6) (56.9) (78.4)
Current tax liabilities (0.6) (1.1) (0.7)
------------------------- ------------------------- ------------------------
Total current
liabilities (72.2) (58.0) (79.1)
------------------------- ------------------------- ------------------------
NET CURRENT ASSETS 14.6 39.1 32.1
Non-current liabilities
Trade and other payables 15 (6.3) (6.3) (6.4)
Total non-current
liabilities (6.3) (6.3) (6.4)
------------------------- ------------------------- ------------------------
NET ASSETS 8.3 32.8 25.7
------------------------- ------------------------- ------------------------
EQUITY
Share capital 1.0 0.2 0.2
Reorganisation Reserve (0.8) - -
Retained earnings 8.1 32.6 25.5
------------------------- ------------------------- ------------------------
TOTAL EQUITY 8.3 32.8 25.7
------------------------- ------------------------- ------------------------
Condensed Consolidated Cash Flow Statement
For the six months ended 30 September 2016
Note Unaudited Six Months Unaudited Six Months
ended 30 September 2016 ended 30 September 2015 Audited Year ended 31
GBPm GBPm March 2016 GBPm
Cash flows from operating
activities
Cash generated from
operations 16 6.3 7.2 17.9
Interest paid (0.6) (0.4) (0.9)
Income tax (paid) /
received (1.1) (1.1) (2.8)
-------------------------- -------------------------- --------------------------
Net cash generated from
operating activities 4.6 5.7 14.2
-------------------------- -------------------------- --------------------------
Cash flows from investing
activities
Purchases of property,
plant and equipment (4.6) (0.4) (1.3)
Proceeds from sale of
property, plant and
equipment - - 0.1
Interest received 0.1 0.3 0.6
Transactions with related
parties (0.8) (1.5) 4.3
Net cash (used in) / from
investing activities (5.3) (1.6) 3.7
Cash flows from financing
activities
Dividends paid to owners (4.4) - (9.9)
-------------------------- -------------------------- --------------------------
Net cash used in financing
activities (4.4) - (9.9)
-------------------------- -------------------------- --------------------------
Net (decrease)/ increase
in cash and cash
equivalents (5.1) 4.1 8.0
Cash and cash equivalents
at the beginning of the
period 11.6 3.6 3.6
--------------------------
Cash and cash equivalents
at end of period 6.5 7.7 11.6
-------------------------- -------------------------- --------------------------
Net cash and cash
equivalents comprises:
Cash at bank 6.5 7.7 11.6
-------------------------- -------------------------- --------------------------
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 2016
comprise the Company and its subsidiaries, together referred to as
the "group".
On 9 May 2016, the Company obtained control of the entire share
capital of Motorpoint Limited via a share for share exchange. There
were no changes in rights or proportion of control exercised as a
result of the transaction. Although the share for share exchange
resulted in a change of legal ownership this was a common control
transaction and therefore outside the scope of IFRS 3. The current
period and comparative information disclosed in these Condensed
Consolidated Interim Financial Statements reflect the continuation
of the pre-existing group headed by Motorpoint Limited and have
been prepared applying the principle of predecessor accounting
ownership. The balance sheet as at all periods presents the legal
change in ownership of the Group, including the share capital of
Motorpoint Group plc and the capital reorganisation reserve arising
as a result of the share for share exchange transaction.
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 2016 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 Limited for the year ended 31 March 2016 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 2016.
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 Limited for the
period ended 31 March 2016 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 2016 are listed in the Motorpoint Limited
Annual Report and Financial Statements on pages 16-23. Furthermore,
at the date of authorisation of the half yearly financial report
there are a number of standards and interpretations also listed on
pages 16-23 of the Motorpoint Limited Annual Report and Financial
Statements which were in issue but not yet effective, as such these
have not been applied in these statements. The impact of these
standards and interpretations in future periods is currently under
review.
During the period ended 30 September 2016 and following listing
on the London Stock Exchange the Group issued a number of share
based payment arrangements in which the Group receives services as
consideration for its own equity instruments. These are accounted
for as equity settled arrangements. The fair value of services
received in return for share options is calculated with reference
to the fair value of the award on the date of the grant. The
Directors have made assessments over the period over which the
share awards are expected to vest and assumptions over the number
of options expected to meet the performance criteria.
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to equity shareholders by the number of
ordinary shares in issue at the reporting date. Share options which
are in issue are considered dilutive when their performance
conditions are met. Underlying earnings per share are calculated in
the same way but after adjusting earnings attributable to equity
shareholders to remove exceptional items.
The Company's functional and presentation currency is the pound
sterling. Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are re-measured.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement.
4. Comparative Figures
The comparative figures for the financial year ended 31 March
2016 are extracted from the Motorpoint Limited 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 Companies Act.
5. Segment Reporting
The Company has prepared segmental reporting in accordance with
IFRS 8 "Operating Segments", which requires segments to be
presented on the same basis as the management reporting. An
operating segment is a component of the business where discrete
financial information is available and the operating results are
regularly reviewed by the Company's chief operating decision maker
to make decisions about resources to be allocated to the segment
and to assess its performance.
Operating segments are aggregated into reporting segments to
combine those with similar characteristics. 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.
The Company operates through a branch network and separate
financial information is prepared for these individual branch
operations. These branches are considered separate 'cash-generating
units' for impairment purposes. However it is considered that the
nature of the operations and products is similar and they all have
similar long-term economic characteristics, as they are all based
within the UK. Accordingly the Company has applied the aggregation
criteria of IFRS 8 and thus considers it has one reportable
segment. Accordingly no additional segmental information is
required. In accordance with IFRS 8 the following information is
disclosed.
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 (gap insurance). Sales of
related services are recognised when the product is supplied to the
customer. Vehicle extended guarantees 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. Where the Company receives commission income,
primarily arising when the customer uses third-party finance to
purchase the vehicle, the company recognises such income on an 'as
earned' basis.
Six Months ended 30 Six Months ended 30 Year ended 31 March 2016
September 2016 GBPm September 2015 GBPm GBPm
Revenue from sale of motor
vehicles 393.0 353.6 702.0
Revenue from motor related
services and commissions 15.9 13.2 27.2
---------------------------- ---------------------------- ----------------------------
Total Revenue 408.9 366.8 729.2
---------------------------- ---------------------------- ----------------------------
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 Year ended 31 March
September 2016 GBPm September 2015 GBPm 2016 GBPm
Employee related obligations - - 0.7
IPO listing expenses and professional fees 4.0 - 0.6
---------------------- ---------------------- ----------------------
4.0 - 1.3
---------------------- ---------------------- ----------------------
7. Finance Income
Six Months ended 30 Six Months ended 30 Year ended 31 March 2016
September 2016 GBPm September 2015 GBPm GBPm
Other interest receivable on
amounts owed by related
parties 0.1 0.3 0.5
--------------------------- --------------------------- ---------------------------
Total finance income 0.1 0.3 0.5
=========================== =========================== ===========================
8. Finance Cost
Six Months ended 30 Six Months ended 30 Audited Year ended 31
September 2016 GBPm September 2015 GBPm March 2016 GBPm
Interest on stocking finance
facilities 0.6 0.3 0.8
Other interest payable 0.1 0.1 0.1
--------------------------- --------------------------- ---------------------------
Total finance costs 0.7 0.4 0.9
=========================== =========================== ===========================
9. Taxation
The tax charge for the profit before non deductible IPO expenses
is provided at the effective rate of 21% (2015: 21.6%) representing
the best estimate of the average annual tax rate expected for the
full year profit before non deductible IPO expenses. Adjusting for
the non deductible IPO listing expenses, the effective tax rate for
the six month period is 45.8%.
10. Dividends
Six Months ended 30 September Six Months ended 30 September
2016 GBPm 2015 GBPm Year ended 31 March 2016 GBPm
Dividend in specie 14.4 - 2.6
Cash Dividends 4.4 - 9.9
------------------------------- ------------------------------- ------------------------------
Total dividends 18.8 - 12.5
------------------------------- ------------------------------- ------------------------------
Dividends in the period ended 30 September 2016 were paid prior
to the Motorpoint IPO. The dividend in specie relates to the
settlement of certain related party balances as outlined in the
Motorpoint Group plc prospectus.
11. Earnings Per Share
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to equity shareholders by the number of
ordinary shares in issue in the year. 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 Year ended 31 March 2016
September 2016 GBPm September 2015 GBPm GBPm
Profit Attributable to
Ordinary Shareholders
(GBPm) 1.3 8.0 13.4
Exceptional Items (GBPm) 4.0 - 1.3
---------------------------- ---------------------------- ----------------------------
Adjusted Profit
Attributable to Ordinary
Shareholders (GBPm) 5.3 8.0 14.7
---------------------------- ---------------------------- ----------------------------
Number of Shares in Issue
(GBP'000) 100,194 100,000 100,000
---------------------------- ---------------------------- ----------------------------
Earnings per share (pence) 1.30 8.00 13.40
---------------------------- ---------------------------- ----------------------------
Adjusted Earnings per share
(pence) 5.29 8.00 14.70
---------------------------- ---------------------------- ----------------------------
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 has been capitalised.
13. Trade and other receivables
30 September 2016 30 September 2015 31 March 2016
Due within one year GBPm GBPm GBPm
Trade receivables 2.2 2.0 1.7
Amounts owed by related parties - 21.4 14.2
Other receivables 0.1 - 0.2
VAT recoverable - 0.3 -
Prepayments 3.9 2.7 4.5
Accrued income 0.8 0.6 0.9
------------------ ------------------ --------------
7.0 27.0 21.5
------------------ ------------------ --------------
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 2016 30 September 2015 31 March 2016
GBPm GBPm GBPm
Trade payables
* Trade creditors 5.8 6.7 14.5
53.0 40.6 51.0
* Stocking finance facilities
Other taxes and social security 0.6 0.5 0.6
Accruals 7.5 5.4 7.4
VAT Payable 1.7 - -
Deferred extended guarantee income 2.6 2.0 2.2
Amounts due to related parties 0.4 - 1.0
Other creditors - 1.7 1.7
------------------ ------------------ --------------
71.6 56.9 78.4
------------------ ------------------ --------------
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 2016 30 September 2015 31 March 2016
GBPm GBPm GBPm
Deferred extended guarantee income 6.3 4.7 5.5
Other creditors - 1.6 0.9
------------------ ------------------ --------------
6.3 6.3 6.4
------------------ ------------------ --------------
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 2016
September 2016 GBPm September 2015 GBPm GBPm
Profit for the year,
attributable to equity
shareholders 1.3 8.0 13.4
Adjustments for:
Taxation charge 1.1 2.2 3.5
Finance income (0.1) (0.3) (0.5)
Finance costs 0.7 0.4 0.9
Operating profit 3.0 10.3 17.3
Share Based Payment Charge 0.1 - -
Exceptional items charged
to operating profit 4.0 - 1.3
Depreciation charge 0.6 0.4 1.0
Cash flow from operations
before movements in
working capital and cash
flow on exceptional
items 7.7 10.7 19.6
Decrease (Increase) in
inventory 8.8 10.6 (5.0)
Decrease in trade and other
receivables 0.3 1.9 0.2
Increase (Decrease) in
trade and other payables (4.3) (15.2) 4.7
Cash flow from operations
before exceptional items 12.5 8.0 19.5
Payments in respect of
exceptional items (6.2) (0.8) (1.6)
---------------------------- ----------------------------
Cash generated from
operations 6.3 7.2 17.9
============================ ============================ ============================
Non-cash transactions
In the period to 30 September 2016 and the year to 31 March 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. All related party balances, other than a
GBP0.4m owing to Spring Rental which remains outstanding, were
settled ahead of the group listing on the London Stock Exchange.
The clearance of these balances was as outlined in the Motorpoint
Group plc prospectus.
During the period ended 30 September 2016 rental payments
totaling GBP1.5m were made to Shoby Properties, a related party.
There were no balances outstanding at the end of the period.
Other than the items noted above there were no outstanding
balances at the end of the period with any other related
parties.
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. The Board considers that the impact of the
UK having voted to leave the EU could mean that these risks could
be accelerated and magnified.
All other principal risks are consistent with those detailed in
the Motorpoint Limited 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 2017.
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 FY 2017 interim results of Motorpoint Group plc for the 6
month period ended 30 September 2016. 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 statement of financial position as at 30 September 2016;
-- the condensed consolidated statement of financial performance
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 FY 2017 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 1 and 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 FY 2017 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 FY 2017
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 FY 2017 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
Ireland) 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 FY 2017
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 2016
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 PGGBPGUPQGPB
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November 29, 2016 07:35 ET (12:35 GMT)
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