Motorpoint Group (LSE:MOTR) — Full Year Results for the year ended 31 March 2025

0:00 Good afternoon, and welcome to the MOTORPOINT GROUP PLC full year results investor presentation. Throughout the quarter presentation, investors will be in listen only mode. Questions are encouraged, they can be submitted at any time by the Q and A tab situated right on your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company can review the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CFO, Chris Morgan. Good afternoon to you, sir.

0:31 K. Thank you. Thanks for that. Good afternoon, everybody. So I'm Chris Morgan. I'm the CFO. Been with MOTORPOINT about four and a half years now. And on my side is Jerry, Jerry Warren, who's my head of finance who, I think, was one of my first recruits, actually, and feel one of my most successful recruits as well. So so Jerry runs the runs the finance team for me. So so I'm gonna run through the presentation. Apologies. I suspect some of you won't know MOTORPOINT at all. Some of you will have a, you know, a pretty good understanding, and, you know, some of you be something in the middle. So if you just bear with me, but I'll try and, make it relevant for everybody in terms of, talking through the story and where we are this year. Okay. So we'll look at, progress this year in f y twenty five. So our year end was March 31, so our results went out a couple of weeks ago.

1:27 I'll take you through sort of general business update, touch on the financials, a bit on I'll also talk about finance commissions and and and where we see that, which is obviously a big debate in the in the motor industry and indeed in the finance world and and ESG. And then a look forward in terms of how we see sort of the market developing, maturing, changing over time because we have had a number of sort of tailwind headwinds over the past, probably, four or five years, really, since COVID that affected the motor industry, and in particular, MOTORPOINT. But I'll I'll come on to those, and what we will see is as those headwinds turn into tailwinds, then we will see some benefit going forward, some of which is already starting to materialize. We do feel there's more to go on that one. So so if I look at investment highlights, so I've written down here a number of sort of snapshot views of of how I perceive or how the business perceives MOTRPOINT.

2:27 It is a very fragmented used car vehicle market. You know, our sales are sixty sixty thousand units per annum in the naught to five, naught to six age group. But, you know, that's roughly about two and a half percent of the overall market, and there's no one single big player out there. So, yeah, the way I look at it, it's not two and a half percent. We've got 97 and a half percent of the market to go for. We've got a broad range of stock, which is available nationally. You know, we've got price car cars priced under £10,000 up to sort of $4,050,000 pounds. A whole mix of of make models. We will sell whatever. We will sell petrol. We'll sell diesel, and we'll certainly sell hybrids and and and increasingly so EVs, which is which will be a big opportunity moving forward.

3:22 Data has become ever increasingly important in the business both from how we market cars and and and talk to customers, but also about how we buy cars at what price, and then when we sell them, what the selling price should be. So it's now very much a dynamically led pricing strategy where we we change prices pretty much daily based on what the data tells us. Whereas a couple of years ago, you know, we'd sit in a room or the buying team would sit in a room once a week and and go through a spreadsheet of 5,000 vehicles price them up or down accordingly. Whereas now, it's much more driven by what the data's telling us. We've got very fast stock turn. Low forties is our days in stock. So we believe, you know, sell the car cheaply and turn it as quickly as you can and and avoid any unwelcome depreciation.

4:10 And that really has worked worked well for us in the past. We've got good customer experience. Our NPS is currently running about 84 for the year as a whole. Last year, it was 80. So, again, you know, 80 is our is our is our benchmark internally. And, again, that's we seem to get good customer experience and good reviews, and I think that helps. I did a a number of customers do come back to MOTORPOINT to to buy their next car or indeed a second car for their family or or their kids or whatever. We've got ancillary products, which we believe are best in class finance. We do warranty products. We do one year to four year warranty products. We do paint protection. We do now do alloy alloy wheels, smart repairs, those sort of things as well. So we we offer those at what we believe are good market beating rates.

5:06 MOTORPOINT split. We've got the retail part of it where we retail cars, which is the 60,000 units that I was talking about before. But any cars that we can't retail because they're over six years or or above our mileage threshold, so those are particularly part exchanges or some cellular cars that we buy directly from consumers. Then we push them through a digital auction platform, and those cars turn very quickly. They can turn within sort of nine, ten days on that platform. And, we we we we make a reasonable profit on those cars as well. So so that's a good profit driver for us. Strong balance sheet. It is a capital light business. Historically, we've always had high return on capital employed. Free cash flow is good and high returns, as I mentioned.

5:55 And then in in recent years, over the last twelve months, we have started the programs to to return excess cash to shareholders, whether it be buybacks. So we're on a second buyback that we commenced in April. We did one last year. 3,600,000 shares. We started another one for 3,000,000 shares now. And, also, we've reintroduced the dividend. Quite modest at this point, But as we hopefully see profits grow over a period, then it'd be a progressive dividend policy, and we'll see we'll see that dividend increase accordingly. So MOTORPOINT virtuous circle, this is the way that we do business. We always start with the employees. We we believe that if the employees are happy and they're and they're trained, they know what they're doing, then they can serve the customers well.

6:42 And you've got happy customers, and then that in itself will then drive drive the return and and hopefully shareholder shareholder benefits. So just a couple of snapshots on here. So employees were recently named as one of the top 115. Not sure why it's a 115, but top 115 best big places to work in 2025 by the Sunday time. So, again, we're we're we're very pleased with that. We've got very, very good engagement, employee engagement in the business and have done historically. Record levels of NPS in the final quarter this year, there were 84. And so far, in the first quarter of this financial year, we're now two and a bit, two and a half months in, continuing to track around about that 84 level. And then for shareholders, significant increase in profit year on year, and as I mentioned, returning cash to shareholders.

7:32 So let's just look at some of the main KPIs that we mentioned. North six market share grew 12.3%. That's the 2.4. So, again, I think the point to take away there is there's there's an awful lot of shares still to go. So that's what we're gonna be aiming aiming to drive. Retail units sold were up 14% last year. Total units were up 12%. Gross profit gross retail profit per unit was up almost 10% to over £1,300 from from £1,200. As you can see there, stock turn improves again to forty three days. Profit before tax, we did have a bad year in '24, but, you know, did return to profit of 15,000,000 improvements in f y twenty five. And I'll just come back on that in a second. Proposed dividends, which will go to the AGM next month of 1p a share.

8:31 Customer acquisition cost, this is our marketing spend divided by number of units sold. Really looking at a £1,150 benchmark here going forward, but we have seen over the past couple of years marketing spend getting a lot more efficient and has come down from over £200 a unit. Net cash with 7,000,000 of net cash at the year end and net promoter score, I think I've already mentioned. Market share outperformance. We can see here it gradually improved here in the year. Q one's relatively flat with the market, then in q two in particular, q three, and then into q four. So this is the SMMT data, so it's externally published data.

9:18 And then we compare our market share with with how the markets perform. So you can see we're outgrowing the market. And importantly for us and for those of you who haven't got the background in MOTRPOINT, pre COVID, we used to really only look at the nearly new cars in the naught to two, naught to three market. And, you know, that is good for us. It's where we can turn the cars quickly. They cost less to prepare. They don't need an MOT. They probably don't need a service. So they're a lot more efficient. And what we're seeing now is as new car production started to increase coming out of COVID in twenty twenty two, twenty three, those new cars now are entering our used car market space. So we're seeing significant growth in the naught to two, naught to three market.

10:06 Brilliant basics. So I've mentioned before. So f y twenty three and and particularly f y twenty four, we we we did have some difficult trading conditions. New car production pretty much dried up coming out coming through COVID, and then the semiconductor chip shortage as we went in 2223, which really sort of paralyzed our supply of nearly new vehicles. So we had to go into older older stocks to to to compensate. On top of that, we had interest rates. I think we all know, you know, interest rates less than 1% a couple of years ago, and then, you know, they gradually increased up to over 5% sort of midway through last year. And that has a double knock on effect for us. One is it obviously affects consumer confidence, but it also increases the cost of finance for them if they buy a car on finance, and roughly 50% of our customers do buy buy a car on finance.

11:02 So that became less palatable for them. And also our interest stocking costs. So we we we borrow against the the inventory. And as the stock sorry. As the interest rates increase, then the cost of finance and the cost of money increase, then so our interest costs increased as well. Now we are starting to see that reverse over the past six months. It's still relatively high, but, hopefully, that will will come down as as we go forward to some degree, although we're not expecting that to to go back to where it was anytime soon. And then generally consumer confidence, you know, has taken quite a big hit over the last eighteen months. It has things have improved. I don't think we're out of the woods yet, but but I think, you know, we're in a much better place than perhaps we were a year or so ago, and that, you know, that is evidence by our attention to to profitability.

11:53 So one of the things we did last year was we we'd have sorry. In FY '24, so eighteen months ago, was a program called base brilliant basics, which was just to go back to the essentials. What what made MOTORPOINT great in the past? And so really concentrate on improving customer service, looking very, very hard at pricing, looking at things like data, marketing, where do we get the best returns. And that's paid dividends, and I think that's really evidence with the with the profit growth we've seen last year. Very much focused now on digital capability. You know, I think if we if we've been talking now three or four years ago, there was very much the view that, you know, online was digital was the way forward, and more and more people wouldn't need a showroom. They could just a car online, whether it be Cinch or Zoom.

12:42 And I think we know we're all fairly well versed in what's happened there. Yeah. The reality is omnichannel is is is the way forward. You want to be able to offer the cars on a pitch so people can come and see them because people still do, but you also want a very strong website so that people can start the car buying journey, get the information they want, and then try and deliver a seamless customer journey between between the websites and then people coming in and meeting our staff, our colleagues at MOTRPOINT sites. So very much focused on just brand awareness, CRM, AI, you know, enhancing SEO, you know, is all really, really important. So that is driving better returns. It's probably fair to say that, you know, again, a few years ago, a lot of marketing money would be spent on Auto Trader or TV or radio, Whereas now we're getting a lot more granular, you know, looking at things like Google paid search, but also YouTube's and social media. And, again, you know, how those can operate in the marketplace and where we can see a good return. So at the bottom there, you can see website sessions and orders from digital leads. Yeah. Both increased by over 16% last year. So that's very positive for us.

13:57 We talked about margin. I've talked about pricing. Yeah. This really is paying dividends. And what we've seen recently is our margins are a lot more consistent and, you know, a much higher level than they have been in the past. This is the metal margin, which is the difference between the price that we buy a vehicle for and what we sell it for. Less overage stock, less needs for stock provisioning, clear the stock quicker, and and get a good stock turn. So that's really helped. Sell your car, I will talk about later, but we valued on on our website 300,000 vehicles in f y twenty five. Sorry. On our on our website and also in store. And ancillary products, and, again, we've been expanding that. We've got we now offer a four year warranty product as opposed to just one to three. And and, like I said, I've introduced alloy wheels and paint protect smart repair in the last couple of months, which, again, is doing well.

14:51 And we've managed the cost base. We've we've had to look at headcount requirements very closely. You know, pretty much every head now needs to get approved for myself and the CEO. And so we're keeping that that headcount in line with where we feel the demand is and the volume. And so, you know, we won't accrue to hedge of, you know, what may happen tomorrow. We're very, focused on that. So so that's a good focus. But where we have increased heads in the past year where we've gone from 710 FTEs to seven seven nine. That's purely to satisfy volume increase. But what we have seen in our variable costs is a number of cost savings where we've gone out to market. We've had procurement reviews.

15:36 Energy costs have come down. We've moved more to open banking and reduced less reliance on bank charges, etcetera, banking card charges. So, again, seeing some benefit there, which is reducing that cost base, which is which is good news. These are just some examples of what we're doing with the with the website, some of the things we're in f y twenty five. We're on a journey. We we continue to evolve, but you can see things like bringing cars in preparation coming soon, which, again, is driving incremental sales, Adding ancillary products to finance calculators so that gets incorporated in the cost of finance to customers so they can add the products in so they can see their monthly payments. New cellular car journey, which again, I'll come back to. So, again, that's now automated new logger logarithms, which makes a smooth and simple seamless journey to to value a car realistically.

16:31 Google vehicle listing ads, paid search, which again is a re a really good way of of acquiring leads and and cheap cost per head. CRM investments. So we've we've we've changed our platform, and that's we changed our technology on the platform, which, again, is is delivering improved email performance with customers. SEO content and PR, again, we're we're we're looking at that. SEO, again, has improved. Our rankings have have increased, and YouTube subscribers are growing, as you can see there, rapidly. And a significant number of users growing month on month with YouTube. And then finally, paid social. And AI technology, again, is, you know, is really important how we view this going forward and how we can get the best results.

17:23 We believe that MOTORPOINT continues to offer the best value on auto trade at pretty much 100% of our cars are valued at either low price or or good price, and we compare these daily to always make sure that we're in line with the market or indeed slightly cheaper. And there's a couple of examples there of a couple of vehicles with a couple of competitors. National coverage. So we've got pretty much broad national coverage here. You can see the map is where the stores are, but also our preparation centers and our auction for cars, which is our digital trading trade platform, which I mentioned before. So we've got 21 stores across The UK. On the back of improved performance last year and improved confidence in the business, we've restarted new store opening program with Norwich, which opens in December 2024.

18:20 And, again, I'll I'll speak a little bit about more of that later and how I see that going forward. But I think if you look at this map, what we do know, there's significant areas of the country where we still need a presence and we haven't. So you can see some areas across the South, the M 4 Corridor, across to Bristol, certainly around the M 25 Corridor. There's a couple of opportunities in the Midlands, you know, for example, Leeds. Sorry. Nottingham, Stoke, and then going further further North Leeds, and then one or two sites potentially in Glasgow. So we've got 21 stores at the moment, but, you know, I I could see MOTRPOINT in x number of years, and it's difficult to to say when, but you gotta wait for the opportunities to come along. But I think 30 is a reasonable number to aim for, certainly in the medium term.

19:08 We target a 10% market share in the thirty minute drive times of the market that we operate in. Predominantly, all the stores that we've got now, we do hit that hoop do hit that metric. And some stores indeed are over 20% in the market, which is fantastic. You know, one in every five nearly new used cars is sold to MOTORPOINT, which is a which is a great achievement. The financial highlights. So as we can see here, I think we've touched on on on a few bits of of this already, but we talked about revenues up 8%. The reason that retail units were up 14% and revenues up 8% is the mix, and we have moved to to slightly cheaper vehicles, more affordable vehicles, which really reacted to some of the difficult customer confidence times that were that were occurring in the past eighteen months. But generally, deflation is is stable, yeah, particularly in petrol and diesel products. We have seen EVs come down over the last few years with some quite significant price decreases along that way. But think things are slightly more aligned now with the EV and and its petrol diesel equivalent is more in line.

20:22 We have shied away particularly from more expensive EVs for, you know, the £40,000 and above because of some of the the deflation concerns. But we're we're we're dip our toe in the water carefully, but we are concentrating on the EVs under £20,000 now, which we believe the pricing's a bit more stable and less risk than what we have seen. Good increase in in gross margins up to almost 8% from from 7% a year ago, and that's really the metal margin, as I mentioned earlier. And that's helped by data, which which has obviously got got a big place as we grow forward. Operating expenses increased 7% mainly due to the team, but also some of the new costs associated with with Norwich, which opened in the second half of last year.

21:08 I mentioned the FTE movement and variable costs and then finance costing, you know, as a result of the high interest rates. You know, almost 10,000,000 of interest costs here. But what you can see is, you know, significant improvement in profit for tax on the previous year. Very capsulite balance sheet. As I mentioned, six assets have grown in the main drive from that is Derby. Most of our sites are leaseholds. If indeed we have in the past bought a freehold because that's the only opportunity to get into a market, then we tend to do seven leasebacks, and we've done that with lots of Swansea and Peterborough in in recent years. Derby, the the opportunity to came up to to buy the store buy the freehold, but it also gave us the opportune we also had some land next door to where we could expand that pitch. So so we've now got the hold sites, and we'll look to sell sell and lease back that over the next twelve, eighteen months, depending on the market.

22:10 We are investing in MOT equipment. We wanna bring as much of this in house as possible. Historically, MOTORPOINT's been paying a third party provider to do MOTs, which obviously has a cost implication. But I think more importantly, it's a it's a time factor. So in the past, you know, you may have to wait a day or two for for the MOTs to, you know, be booked in. You gotta take the car there. May fail, then it's gonna go back. Whereas if you can do them in house, you're in control. Mentioned inventory. You can see their inventory's grown from about 100 to 150,000,000 year on year, significant increase. But that clearly that reflects the the sales increase and, you know, the opportunity that we've got with having more stock.

22:55 Generally means more sales up to a point, and we're certainly seeing that having more inventory compared to a year ago is paying dividends. The other big number on there is is trading of the payables, which have gone from a 107 to a 155. And that pretty much mirrors the inventories because we take out stock and facilities to to fund the stock, which works pretty efficiently. So, you know, usually about 85% of our stock will be funded through a facility.

23:26 K. And just yeah. So cash outflow is quite significant in the year. I'll I'll show a quick cash flow movement over the page, but no structural debts. We've also got a bank facility of 20,000,000 that was extended out to June 27 a couple of months ago, but we weren't using that at year end. So that is available should we need it. So from a cash flow perspective, you can see the movement from nine to nine to seven. EBITDA is 24,000,000. CapEx relatively high, and that's primarily because of the the purchase of the Derby Freehold and the land as well. So there's 4,700,000 invested in into Harvey. Interest costs, I've mentioned, lease of 6.7.

24:14 Then the 4.7 here is the share, but the first share buyback that we did, 3,500,000 shares.

24:21 And then we've also bought forward on employee benefit trust. So these are shares to satisfy future share options and save as you earn schemes. And we believe that the share price has been fundamentally undervalued for quite a period of time. So we've now bought ahead, and we're we're we're good up until January 2028 in terms of share requirements there. And then a net working capital improvement of 5.4, given us cash of 7,000,000. Finance commissions, ongoing saga. Yeah. I suspect a number of you are aware of of of some of the background. I mean, probably the latest bits to add in here is that the Supreme Court met on the April 3 for for a few days, and their results are still awaited in terms of what their what they come out with. We think we will hear August, September, but, you know, this has just been one of those things that has dragged on, so I wouldn't wanna put my mortgage on that, but it it is possible.

25:25 But any future potential liability compensation is believed to be the the liability of the lenders of of not MOTRPOINT. We've we've done nothing wrong as a dealer and simply following instructions. As you know, some of the, you know, the big finance lenders have made have made some provisions, but we have not. And, again, you know, our disclosures have tightened up, so we always give the the amount of commission then. And, again, no real adverse customer feedback in respect of that. So so no adverse trading impact or or provision requirements based on what we've seen this year. Capital allocation. As I mentioned, we do we do throw off cash, which is which is a strength of MOTORPOINT.

26:12 So we do want a policy that's aligned to strategy. The first requirement always will be organic growth and margin expansion. So if we if we if we can grow sales, whether it be new stores or digital capabilities, then that will be our priority. And that's what we've started to reintroduce in the year just gone. But given the the the forecast that we've got, this will leave capital left over. And as you say, we we were confident enough to do a share buyback last year despite, you know, the the loss and another buyback this year and reintroduce dividends. So we're confident in that. Historically, we haven't done many acquisitions, but I'm not saying you know, I'm saying never, but, you know, if something is EPS accretive with a good risk profile with the industry logic, then we may consider it. But it's not something we're actively striving for because we believe that there's plenty of organic opportunity to grow the business, not not least with new stores in terms of areas of the country where we still wanna be.

27:12 And then ESG, so this is really, really important to us. We do wanna be seen as the most environmentally friendly used car retailer and be a great place to

27:25 work back in 2024. We were recognized by the Financial Times as one of the leaders in in green and bringing forward the ESG agenda, so we're very proud of that accolades. Scope one and two emissions are down. Energy is down. Total waste is down to 15%. We've looked at things like how we can work better with store managers in terms of, you know I always say to treat MOTORPOINT money as your own or or treat energy costs as your own. You know, would you shut that door? Would you open that window? Would you turn the air con off, etcetera? So we're trying to get that ethos right across the business with managers, which I think is now having a bit of cut through. And we've also looked at waste and recycling and number of pickups, etcetera. People, as I mentioned, great engagement in the top 100 a 115 rather, so many times, best places to work.

28:12 Focus really hard on comms and culture this year, and there's more to do. But but, again, that that's a big area for us. And also diversity, equity, and inclusion, which is very important. And, again, we we revised our policy, and that was approved by the board in March just gone. So if I look at how MOTORPOINT's gonna grow, I've mentioned some of this slide in a way for for those who don't know MOTORPOINT. This probably would have been a good start slide to start with because we did show this slide about eighteen months ago for the first time. And all those four boxes, like the interest rates for, were all red because metal margins are struggling. You know, supply was poor, and the market size is actually decreasing as we came out of a lack of new cars going into the used car cycle.

29:00 Where we are now, I think we're halfway down that journey. So the headwinds are are becoming tailwind, which I'm happy to say. Self help in terms of metal margin improvement has been really, really strong, and that's definitely rated a green. We are seeing more areas of supply now coming back, so manufacturers and fleet companies because there's more of the nearly new product coming into our ecosystem than we're able to pick up a lot more bulk deals than perhaps we were in the past. We've also got some very good relationships with some of the manufacturers and fleet rental companies. So, again, you know, they quite often ring MOTORPOINT first. We pay well. They know we pay on time, and we will take bulk products of, you know, a few 100 cars in one go, and we'll get it through our supply chain very quickly and get them on on on the pit. So, again, that that's really good news to see that coming back. More to go still, but it does that really does help us.

29:56 Market size is starting to increase, which is great, particularly the naught to two, naught to three, which is where we really wanna concentrate if we have the opportunity. So, again, you know, rated those two as amber. Interest rates will probably, you know, amberish red. They have started to fall, and you'd hope the direction of travel would be further improvements or be it quite gradual. But, again, you know, every time the interest rates fall, it doesn't improve the cost of money, and it means we've got the opportunity to bring down APRs. But, also, our interest rates will will naturally fall as in as the interest cost money falls. So those four categories there are really big drivers in terms of moving PBT forward. So if you looked at this slide a year ago, it would have been a 10,000,000 loss up to a 4,000,000 profit where some of these were starting to materialize, particularly the metal margin. And you can see now going forward, we can see more opportunity for PBT to grow.

30:53 Strategy updates. So there's about six buckets here where we're really concentrating over the medium term in terms of growing business. New supply chains, I just mentioned this, but if we can increase the number and scale of sourcing channels, it gives us more opportunities. And the other one is sell your car. So we buy any car buy anywhere between 4 or £500,000 four or 500 vehicles a year.

31:20 We buy about three or 4,000 vehicles a year. So if we can buy more cars directly from consumers, then that will increase efficiency. It will reduce purchase fees rather than having to go to auction to get that car. And it's quite often the same car that might go through we buy any car, let's say, or MOTRWAY into an auction and then back to us, whereas in effect, we go direct to the customer. All the systems are now set up. The logarithms, the valuations, the website is all tick tick tick, which is all really, really good. The the bits that we're working through at the moment is just the the allocation and and giving customer slots to come and drop their vehicle off, get it viewed. It's quite often a vehicle a a customer wanna come in the Saturday afternoon.

32:07 Unfortunately, it's the same time as we're very busy selling cars in our in our state. So we need to find how we can crack that nuts, whether it be more employees or or whatever it might be or scheduling or or encouraging consumers to come at different times or evenings or or whatever it might be. But we we see really, big opportunity there. Like I say, we're about any cars best part of half a million, and we do four four thousand cars. So we see a big opportunity to grow that number. New stores. Blueprints now for larger sites. So we have coming out of COVID, we opened we've got four sites that we believe are probably too small as it turns out in hindsight. If you go back to 2021, when everyone was thinking that online was the way forward and you didn't need these big pitches to to sell vehicles, we hedged our bets a little bit, and we opened up some stores with sort of between 75, 80, and and a 150 pitch capacity.

33:08 Now those stores are still making money for us. They're doing okay, but we're never gonna get to that 10% market share that I mentioned before. So we've now reverted back to to larger sites to to sell our vehicles from. And Norwich is roughly about 248 or 250 pitch capacity, and it can also do its own preparation as well. So so, again, it can service its own customers directly on-site. And Norwich is open well, before central cost is is is making a decent profit for us. We talked about data and AI. You know, this will be a a big focus for us. You know, we've got a very strong now digital marketing team. We've recruited quite heavily historically in that area, you know, to bring in the big brains who can really exploit the opportunities that's that's happening here.

33:58 And, again, you know, I'm really comfortable with this area, and I think it's still a journey, but I think, you know, you can really see how we're starting to to drive these things forward. So that's an area of focus for us. Brand reach, new and existing channels to reach customer. I mentioned before, you know, it's not just about TV and radio like it would have been years ago. You know, social media in in particular has become very, very important. So how we engage with customers is increasingly taking focus for us. And the website, you know, is such an important destination. You know? Roughly, up to 90% of our customers start their buying journey on our website. So, you know, having that website, you know, is really, you know, state of the art and and upfront as it can be is really, really important.

34:45 So giving the customer's information, whether it be to review cars or make model searches, etcetera, etcetera. So so, again, that that continues to be a focus. Tech talks about best in class on on the website to optimize functionality. Complete omnichannel approach to customer CRM with with full personalization. Now understanding the customer needs is really important. And paid media opportunities as well. The thing that we have started now, we talked about MOTs in house, and so we've got national coverage for MOTs as we sit here today. So we we can can do do our our own own in house MOTs. But over time, we wanna look at service plans, warranty work, MOTs for for customers, and we're trialing that at the moment. We're we're looking at new systems.

35:36 And this is really important, not just because it'll make a decent margin for us, but because you keep the contact with the customer over that four and a half year period, which is normally when they'd go to come to MOTRPOINT. Four years later, five years later, they come back to buy another vehicle. But if they're coming back every year to have their car serviced, etcetera, you know, we keep that contact with them. And, you know, I think we all know we walk through a showroom one day and we think, you know, we see something that we suddenly like and thought of. You know, before you know it, you're thinking about that vehicle as perhaps your next purchase, you know, in advance of of perhaps what you might otherwise have. So so, again, that could be a big opportunity to grow, but the plans are exciting nonetheless. So current trading, volume growth across April and May.

36:26 So tougher comparators at the start of last year, but, again, you know, decent growth and profitability is growing month on month and year on year. So, again, that's that that's very encouraging. Vehicle pricing, it it remains stable, and so it has been generally for quite some time now. Metal margins continue to strengthen. Talked about data. We have seen cellular car growing year on year, which is the c to b channel. So, again, some of the website improvements has improved in that, but we have got some way to go still. And NPS has been running at an all time high, which is consistent with that final quarter eighty four as I mentioned. So so going forward, profitable growth and responsible growth is is a priority. We we expect an ongoing macroeconomic pressures to to generally ease, reductions in interest rates over time, but but, again, moderate.

37:18 We are mindful that consumer confidence is is is still slightly uncertain in the in the short to medium term, and but we are seeing more new supply coming back and slightly you know, sort of more of a slight return to normality in that front. So so that's good. We continue to take market share. I think that's the the really important thing for us, and we do remain optimistic for future profitable growth. So thank you. So I think that's that concludes the the presentation. Per perfect. Well, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions, and you can do so just by using the q and a tab that's situated on the top right hand corner of your screen. But just while the company take a few moments to review the questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboards.

38:11 As you can see, we have received a number of questions both pre submitted and throughout today's live presentation. And if I could just hand back to you to read out the questions and give response to it as appropriate to do so, I'll pick up from you at the end. Okay. Lovely. Thank you for that. I think this first few, I can whisk through really quickly. We introduced the dividends. Well, yeah, I think it it it reflects the board's confidence in the business in terms of returning capital to shareholders. The buyback as well, I could probably said the same thing about the buyback, which we did do last year and then going forward. What can we expect? As I mentioned, the progressive dividend policy, 1 p 1p a share. I think it's roughly about 27, 28% of of EPS. So I'd be looking in that 40% range going forward. But, again, you know, it'll depend on circumstances.

38:59 But, you know, as we grow profits, we grow EPS, then I would hope that the dividend would certainly follow that that growth expectation. So as I say, the expectation is that dividend's here to stay. As I say, the buyback, we're on a second buyback. And, you know, if we have excess cash in the future, we'll we'll we'll make a call on what we do with that. How many stores do you you hope to open and timings? I think I mentioned this probably over the medium term up to 30, which is another nine or 10, guess. Timing's really, really hard. I mean, I I could name about eight sites at the moment we're looking at. Some are fairly well advanced. Some are probably I just know now that they probably won't come off because of the cost of the rent or whatever. But we're continually looking at new stores. You know, a little bit like buses. Sometimes two or three will come along in in in in one go. So it might be that we won't go we we'll go a year without opening, and then it'd be two or three the following year. But, ideally, it'd be one or two a year if we could, you know, if I could cherry pick and and just managing the time frame between them.

40:02 Nearly new vehicles recently as you've sold older vehicles, why and what is the plan? Well, reason why we sold older vehicles well, two reasons, really. One is there weren't enough newer vehicles to sell, so we were losing market share in that area. And the second thing was, again, this is driven by our data. What we realized a year or so ago was that our new customers, even though returning customers were growing, our new customers customers in MOTRPOINT weren't, and we weren't quite sure why. So looking at the data, we discovered that new new customers tended to buy cheaper models. Now I suspect that's because they got less confidence in the MOTRPOINT brand than perhaps a returning customer might have, and so was more willing to spend £10,000 on a on a car, but not 20,000 or £30,000.

40:50 And so we deliberately went into that old older stock to attract those newer customers. And what I am pleased to say is that newer customers are now growing as our returning customers as well. So both have contributed to the the 14% retail growth I referred to earlier. Size of the price from acquiring new cars, selling cars, right, from consumers. I did touch on this, but, yeah, I gave you the, you know, the the the between where we are and perhaps where where we buy any car. I was obviously the market leader in in the direct buying. So, you know, use hope that there's a a big chunk of that difference that we can start chipping away at, and certainly those are our plans. So wouldn't wouldn't like to give you a number in terms of the size of the price, but I think you can see that there is opportunity there.

41:38 Proportion of total sales now is fully online, and how does the digital conversion rate compare to in stores? So online, which is where a customer will either digitally transact, which means going through the website and not even speaking to anybody or picking the phone up, it's quite a low single digit number. If you include the online team as well so that we have a call center online team, similar to what someone like a Kazoo or Cinch have, then there's about 30 of our product is going through that channel as opposed to customer starting on the website and then going direct to a store for themselves. So it's about seventy thirty is the is the split. Is interesting, is, obviously, during COVID, the online shot up to fifty, sixty percent, you know, overnight pretty much because our stores were closed.

42:31 So well, 100% for a period. But in that year, you could see that online was was well over 50% for the year as a whole. When we exited COVID and then gave, you know, a bit of a run rate, that online participation was more around about 37, 36, 37%, and we did think that would slowly grow to sort of 50% over time. If anything, it's gone the other way. Well, it has gone the other way, and we're now currently running more like about 30%. So we have seen quite a shift in that pattern. So I think the important thing is, you know, you need a brilliant customer service online team. You need a brilliant store team. You need a brilliant website. You need a brilliant digital team. It's all about that omnichannel journey because customers oscillate between the various touch points.

43:20 Okay. So I think sort of half answered the cellular car proposition. I think the improvements we we have done is the tech behind it, behind the scenes, and getting your car valued and the logarithms and and everything else to make sure the prices are reasonable. Bit that we haven't cracked yet is the resourcing behind it in terms of our stores because you've always got you're almost relying on the same people who either they can sell cars or they can take a cellular car in from consumer. And now clearly that the cellular cellular car proposition means they can have a lot more money through commissions and bonuses that way than perhaps taking a car through cellular car. So we we we're we're looking hard at how we do that. That said, we have seen about 30% growth in already this year compared to last year because of some of the background stuff that we're doing, but plenty still to to get over.

44:11 If capital was unrestricted for the next few years, what part of your strategy would you accelerate, and what areas would you hold back on? So I I think the biggest opportunity on top of what we're already doing is is is the new stores. Because if you can get over three to four maturity period to send 10% in every new market that you go into, where you're gonna see significant market growth. So I think that would be it, new stores, but, obviously, there's, you know, a bit of a limiting factor. You can't open three new stores at once. You need to be sensible. But I think new stores is certainly one. We'd certainly look at buying freeholds if they became available, although leaseholds would be our priority. But we would then look to do a sale and leaseback if we did do the freeholds.

44:57 I think the interesting one as well is after sales. I think it's probably too early to say too much yet, but but, again, you know, how big could after sales be? You know, you've got the likes of QuickFit. How it fits people like that, the, you know, the market leaders, and, you know, it's profitable businesses for the for for those people. So, again, you know, we're sweating the same asset that we've already got. We've already got the space, so it's just a question of using using it slightly differently to to attract customers to the after sales proposition. So hard to tell yet. We're as I say, we're trialing it this year and putting a new system into sort of, you know, tracking, and we can start to record things like technicians and and, you know, how efficient are they and speed of of doing the work and all those sort of things. So that that's really exciting. But, again, you know, we may wanna invest to grow that quicker.

45:46 Could you please provide more detail on the lease? It's a good question to end on. Restatement, please. Yes. This is where we discovered back end of last year is that some of our back in FY twenty four, some of the mainly '24, the rent reviews from landlords hadn't actually come through. And if they just automatically happened, and so there wasn't any documentation. We carried on doing the the IFRS 16 calculation of the right of use assets and the liability as we were doing. As it turns out, then there was adjustment of about 2,000,000 historically going back, which was a gross adjustment. It affected the asset value and the the the lease liability as well. So there's no net asset effect or profit impact. So so that's correct. It shouldn't should be right. Just certainly hope so going forward.

46:42 Alright. Well, perfect, Chris. Well, thank you very much for answering those questions from investors. Of course, the company can review all the questions that have been submitted today, we will publish the responses on the investor meet company platform. But just before redirecting investors to provide you with their feedback, it's particularly important to the company. Chris, could I just ask you for a few closing comments? Yeah. No. Well, first of all, thank you for for investing the time. Apologies for those who perhaps know the story. And, again, well, thank you for your for your interest previously previously as well. As I say, it's been I've been here four and a half years. And during that time, we've had COVID. We've had the new car shortages. We've had semiconductor semiconductor chip problems. We've had interest rates. We've had consumer confidence.

47:29 We've had the finance commissions. We've had you know, it just seems to be, you know, issue after issue. Not saying that we're totally out of the woods, but certainly as I sit here now, I do feel a lot more confident confident than what I was eighteen months ago. And and the fact that our profit's now in an upward trajectory, we've had a good solid start, I would say, to f y twenty six. I feel a lot more confident now than perhaps I have been in the four and a half years I've been been at MOTORPOINT. And I think that's, you know, reflected. And my confidence in the boards as well is the fact that, you know, we're starting to give capital back to shareholders and have been over the past twelve months now. So it does give a confidence in in the business going forward. And, again, you know, pleased that we've we've done the dividend. I think there's still loads of opportunity to go. You know, I keep banging on about, yeah, this 97 and a half percent of that market still to get after. So I think if we get all all our ducks in a row and we do the right things, whether it be to sell your car, whether it be after sales, whether it be the digital platform, the websites, new stores, all these things, if we can focus on all those, get the brilliant basics, get that right, which I think we've done, but continue to master that, and then make improvements going forward and keep evolving with how the customer operate shops and wants to operate, then I think we can continue to take some good market share going forward and and hopefully deliver a significant profit increase.

48:55 That's great. Well, Chris, thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of MOTORPOINT GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Okay. Thank you all.