ANALYSTS at Liberum have slashed their forecasts for Motorpoint after the car dealer reported a £10.5m slump in profit.

"We reduce our 2023 profit before tax by 50 per cent to £7m," Liberum's senior analyst Sanjay Vidyarthi wrote yesterday.

Motorpoint - which yesterday posted a record £785m revenue for the six months ended 30 June - reported a 77 per cent drop in profit, with profit before tax fell to around £3m compared to last year's £13.5m.

The company said the decrease was due to a £4m investment to expand its share in the zero-four year-old car market from 2.9 per cent to 3.6 per cent.

"The board strongly believes there is a significant opportunity for Motorpoint to become a highly profitable market leader, and that certain targeted strategic investments are important particularly as some of the group's competitors are less ambitious or lack financial capacity," the company said in yesterday's trading update.

"The results of the strategic investments made to date underpin this belief and the current strategy."

Economic volatility and the consequent consumer uncertainty are also expected to reduce UK car sales volumes.

(c) 2022 City A.M., source Newspaper