Motorpoint Group PLC on Wednesday reported substantial annual earnings growth, though its stock fell as the vehicle retailer cautioned on an uncertain outlook as supply chain challenges put pressure on new car output.

Motorpoint shares were 7.2% lower at 209.24 pence each in London on Wednesday morning.

In the year ended March 31, revenue climbed 83% to £1.32 billion from £721.4 million. Pretax profit more than doubled to £21.5 million from £9.7 million.

Revenue hit a record high thanks to a ‘combination of market share growth and vehicle price inflation’, Motorpoint said.

E-commerce revenue alone rose 43% to £624.9 million from £437.1 million. Over 60% of overall unit volumes stemmed from online channels, the company said.

In June 2021, Motorpoint had set out an aim to grow e-commerce revenue to £1 billion over the medium term.

Motorpoint noted it was a ‘very successful year, both in terms of delivering excellent operating results and progressing on its strategic objectives’.

There are challenges ahead, however.

‘The impacts of rising inflation and worldwide vehicle supply chain challenges are likely to continue to affect our markets and all industry participants. In general, rising inflation is putting increasing pressure on discretionary spending power and consumer sentiment, and this position has worsened since the start of our new financial year,’ it cautioned.

‘This is very likely to reduce overall sales and transactions in our markets. Further, supply chain shortages will continue to limit new car production in the near term, which in turn constrains the supply of used cars that fit our nearly new criteria. The precise extent to which these factors will impact consumer behaviour and our markets is increasingly difficult to predict.’

The used car market is showing more signs of strength, however.

‘Many traditional competitors are changing their models, refocusing and diversifying, while several other large and well-capitalised players are entering our markets and competing aggressively, albeit not all of them are proving successful business models. The board sees further consolidation as likely over time as changing market dynamics continue to play out,’ Motorpoint said.

When ‘macro headwinds’ ease, Motorpoint expects to be in a stronger position, thanks to its chunkier market share and recent investments.

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