Shares in Motorpoint (MOTR) rallied after the omnichannel car seller reported a forecast-beating 83% profits surge for FY26.
This was driven by record retail volumes of around 65,000, an 8% year-on-year increase demonstrating continued outperformance of a tough used car market.
Motorpoint also said it will open in Leeds this summer. The new site is on a busy route close to the city centre and Elland Road.
‘The city of Leeds, and surrounding areas, provide an excellent opportunity to access a new, large market,’ insisted the company.
Pedal to the metal
Steered by CEO Mark Carpenter, the former CFO of Sytner, Motorpoint’s bread and butter is the sale of nearly new vehicles. These are typically cars under six years old with less than 40,000 miles on the clock.
The Derby-headquartered company operates from a nationwide store network. It also owns Auction4cars.com, the UK trade-only car auction site.
For the year to March 2026, Motorpoint now expects to deliver pre-tax profits of roughly £7.5 million.
That’s up 83% year-on-year and comfortably ahead of the £7 million Shore Capital was calling for. Performance was underpinned by a record metal margin performance, which helped offset inflationary pressures.
Embracing AI
‘FY26 has been a step change year for Motorpoint, where the use of data became fundamental within the business and we started to embrace the benefits of AI,’ explained Carpenter.
Motorpoint said its new agentic AI tool is helping to drive sales. ‘Supply of vehicles has returned to more normalised levels,’ added Motorpoint, which is securing more bulk deals as a result.
Cautious optimism
Motorpoint did concede that the macroeconomic uncertainty in recent weeks leads to ‘a degree of caution’ due to the risks of increased inflation and interest rates.
Nevertheless, the company insisted:
‘Our superior customer service, omnichannel business model and exciting growth plans mean we are well placed to take advantage of opportunities to further increase market share and build long term value for shareholders.’
Given expectations for interest rate increases and uncertainty around fuel costs, we wouldn’t be buyers of the automotive retail sector right now.
UK consumers remain cautious on big ticket spending and the sector’s notoriously low margins remain under pressure.
But on a longer-term view, there is lots to like about Motorpoint. The company’s post-Covid profit rebuild continues and it has growth to go for in a fragmented UK used car market.
Motorpoint’s competitive pricing is helping it gain market share.
And the firm is geared into customers growing preference to buy used cars on an omnichannel basis, combining digital channels with physical touchpoints.
Read the press release here: https://www.motorpoint.co.uk/plc/investor-relations/announcements
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