Motorpoint Posts Record Sales and 83% Profit Surge in FY26 Final Results

Motorpoint margins, data and AI investment are translating into real profit growth

Motorpoint is making a big point of its data-led model, and for once that does not read like generic corporate waffle. Gross margin improved to 7.8% from 7.7%, retail gross profit per unit rose to £1,368 from £1,335, and management says it achieved record metal margins.

Metal margin is basically the profit on the car itself before finance and add-on products. That matters because finance commission income is still weak due to elevated interest rates. In other words, Motorpoint is proving it can still make good money selling cars even when finance-related income is under pressure.

There are some tangible operational wins here too. Customer acquisition cost fell to £163 from £177, website sessions rose 14% to 18.1 million, and Net Promoter Score improved to 84 from 80. That suggests better marketing efficiency and a stronger customer proposition, not just short-term discounting.

The AI angle is also more concrete than usual. The company says 877 incremental sales in FY26 can be attributed to its AI channel that follows up on historic closed leads. That is the sort of use case investors should like – practical, revenue-linked, and not just a presentation slide with the word AI splashed across it.

Another standout was sourcing. Vehicles bought through Sell Your Car rose 85% to 6,603, and total cars bought direct from consumers including part exchange reached 46k. That is important because better sourcing can support both stock availability and margins.

Cash, debt and inventory: the main weak spot in these Motorpoint FY26 results

It is not all rosy. Net debt excluding lease liabilities moved to £8.8 million from net cash of £6.6 million. That swing was driven by heavier stock buying, £13.1 million spent on two freehold sites in the final quarter, a £5.0 million share buyback, and £1.2 million spent on shares for future employee scheme obligations.

Inventory jumped to £194.1 million from £151.4 million, while days in stock increased to 54 from 43. More stock can be good if demand is there, especially heading into busy periods, but it also ties up cash and pushes up finance costs. Sure enough, finance expense rose 9.6% to £10.3 million.

This is the part I would keep an eye on. The business says strong supply and stable margins continue, and early FY27 trading supports that. But if consumer demand wobbles, higher inventory always increases the risk of margin pressure later on.

Dividend, buybacks and return on capital show a shareholder-friendly approach

Motorpoint is not just talking about growth. It is also returning cash. The proposed final dividend is 1.2p, taking the full-year payout to 2.2p, equal to 33.3% of basic earnings per share.

On top of that, the group completed a buyback of 3.0 million shares for £5.0 million. Since March 2024, it has returned £11.7 million to shareholders through dividends and buybacks, while cutting shares in issue by over 7%.

Return on Capital Employed climbed to 67.2% from 46.6%. That is a very healthy number and backs up management’s claim that this is a capital-light model, even though the balance sheet has taken on more stock and some property investment.

New stores, bigger facilities and strong FY27 trading give Motorpoint momentum

Motorpoint is still in expansion mode. It operates from 21 retail locations now, with Leeds due to open this summer as store number 22. It has also secured development opportunities in three new market locations, with openings expected at the end of FY27 and during FY28.

To support that growth, stocking finance facilities increased to £205.0 million at year end and then to £210.0 million post year end. There is also a new £10.0 million property revolving credit facility. That extra firepower matters because retail growth is easier to chase when you have the stock and sites to support it.

Current trading sounds encouraging too. Retail volume growth across April and May was 15.0%, albeit against weaker comparatives, and the group says it maintained strong profitability. Sell Your Car purchases are running at over 200 a week since year end, which suggests the sourcing story is still improving.

What Motorpoint shareholders should take from these final results

• The positives: record sales volumes, strong market share gains, much faster profit growth than revenue growth, better retail margins, improving customer metrics, and decent shareholder returns.
• The negatives: net debt has replaced net cash, inventory is much higher, finance costs are rising, and the wider consumer backdrop remains uncertain.
• The big picture: Motorpoint looks like a business that has come through a tough period in better shape, with stronger systems, better sourcing and clearer operating leverage.

My view is that this is a good set of results, and better than the headline 82.9% PBT growth alone suggests. The real attraction is that Motorpoint appears to be building a more efficient and more scalable used car retail model while still taking share in a massive market.

The main question now is whether it can keep that momentum without letting stock levels and borrowing become a drag. For now, the early FY27 update says yes. If that holds, these FY26 results could end up looking like a meaningful turning point rather than just a strong year.