Motorpoint Group Plc (MOTR) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Motorpoint Group plc Full Year Results Investor Presentation. [Operator Instructions] 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.

Okay. Thank you. Thanks for that. Good afternoon, everybody. So I'm Chris Morgan, I'm the CFO, been with Motorpoint about 4.5 years now. And on my side is Jerry, Jerry Warren, who is my Head of Finance, who I think it was one of my first recruits actually and one of my most successful recruits as well. So Jerry runs the finance team for me. So I'm going to run through the presentation. Apologies. I suspect some of you won't know Motorpoint at all. Some of you will have a pretty good understanding and some of you will 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 FY '25. So our year-end was 31st of March. So our results went out a couple of weeks ago. I'll take you through sort of general business update. I'll touch on the financials a bit on ESG. I'll also talk about finance commissions and where we see that, which is obviously a big debate in the motor industry and indeed in the finance world 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 headwinds over the past probably 4 or 5 years really since COVID that affected the motor industry and in particular, Motorpoint. But 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, but we do feel there's more to go on that one. So if I look at investment highlights, so I've written down here a number of sort of snapshot views of how I perceive or how the business perceives Motorpoint. It is a very fragmented used car vehicle market. Our sales of 60,000 units per annum in the 0 to 5, 0 to 6 age group. But that's roughly about 2.5% of the overall market. And there's no one single big player out there. So the way I look at it, it's not 2.5%. We've got 97.5% of the market to go for. We've got a broad range of stock, which is available nationally. We've got price -- cars priced under GBP 10,000 up to sort of GBP 40,000, GBP 50,000, a whole mix of make models. We will sell whatever. We will sell petrol, we'll sell diesel and we certainly sell hybrids and increasingly so EVs, which will be a big opportunity moving forward. Data has become ever increasingly important in the business, both from how we market cars 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 change prices pretty much daily based on what the data tells us, whereas a couple of years ago, we sit in a room or the buying team would sit in a room once a week and go through a spreadsheet of 5,000 vehicles and price them up or down accordingly, whereas now it's much more driven by what the data is telling us. We've got very fast stock turn, low 40s is our days in stock. So we believe sell the car cheaply and turn it as quickly as you can and avoid any unwelcome depreciation, and that really has 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, 80 is our benchmark internally. And again, that -- we seem to get good customer experience and good reviews. And I think that helps a number of customers do come back to Motorpoint to buy their next car or indeed a second car for their family or their kids or whatever. We've got ancillary products, which we believe are best-in-class finance. We do warranty products. We do 1-year to 4-year warranty products. We do paint protection. We do -- now do alloy wheels, smart repairs, those sort of things as well. So we offer those at what we believe are good market beating rates. 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 6 years or above our mileage thresholds. So those are particularly part exchanges or some seller cars that we buy directly from consumers. Then we push them through our digital auction platform. And those cars turn very quickly. They can turn within sort of 9, 10 days on that platform. And again, we make a reasonable profit on those cars as well. 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. And then in recent years, over the last 12 months, we have started the programs 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, 3.6 million shares. We started another one for 3 million 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 will be a progressive dividend policy, and 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 believe that if the employees are happy and they're trained, they know what they do, then they can serve the customers well. And you've got happy customers and then that in itself will then drive the return and hopefully 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 115, but top 115 Best Big Places to Work in 2025 by the Sunday Times. So again, 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, they were 84. And so far, in the first quarter of this financial year, we're now 2.5 months in, continuing to track around about that 84 level. And then for shareholders, significant increase in profit year-on-year, as I mentioned, returning cash to shareholders. So let's just look at some of the main KPIs that we mentioned. 0 to 6 market share grew 12.3%. That's the 2.4%. So again, I think the point to take away there is there's an awful lot of share still to go. So that's what we're going to be 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 GBP 1,300 from GBP 1,200. As you can see there, stock turn improved again to 43 days. Profit before tax, we did have a bad year in '24, but did return to profit of GBP 15 million improvement in FY '25. And I'll just come back on that in a second. Proposed dividend, which will go to the AGM next month of 1 penny each share. Customer acquisition costs, this is our marketing spend divided by number of units sold, really looking at GBP 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 GBP 200 a unit. Net cash with GBP 7 million 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 during the year. Q1 relatively flat with the market than in Q2, in particular, in Q3 and then into Q4. So this is the [ SMMT ] data, so it's externally published data, and then we compare our market share 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 Motorpoint, pre-COVID, we used to really only look at the nearly new cars in the 0 to 2, 0 to 3 market. And 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 has started to increase coming out of COVID in 2022, '23, those new cars now are entering our used car market space. So we're seeing significant growth in the 0 to 2, 0 to 3 market. Brilliant Basics. So I mentioned before, so FY '23 and particularly FY '24, 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 '22, '23, which really sort of paralyzed our supply of nearly new vehicles. So we had to go into older stock to compensate. On top of that, we had interest rates. And I think we all know interest rates less than 1% a couple of years ago, and then 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 obviously affects consumer confidence, but it also increases the cost of finance for them if they buy a car and finance and roughly 50% of our customers do buy a car on finance. So that became less palatable for them. And also our interest stocking costs. So we borrow against the inventory. And as the stock -- sorry, as the interest rates increase, then the cost of finance and the cost of money increased, then so our interest costs increased as well. Now we are starting to see that reverse over the past 6 months. It's still relatively high, but hopefully, that will come down as we go forward to some degree, although we're not expecting that to go back to where it was anytime soon. And then generally, consumer confidence has taken quite a big hit over the last 18 months. It has -- things have improved. I don't think we're out of the woods yet, but I think we're in a much better place than perhaps we were a year or so ago, and that is evidenced by our return to profitability. So one of the things we did last year was we -- sorry, in FY '24, so 18 months ago, it was a program called Brilliant Basics, which was just to go back to the essentials, what made Motorpoint great in the past and to 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 evidenced with the profit growth we've seen last year. Very much focused now on digital capability. I think if we've been talking now 3 or 4 years ago, there was very much the view that online digital was the way forward and more and more people wouldn't need a showroom. They could just buy a car online, whether it be Cinch or Cazoo, and I think we're all fairly well versed in what's happened there. The reality is omnichannel is the way forward. You want to be able to offer the cars on a pitch so people come and see them because people still do. But you also want a very strong website so that people can start their car buying journey, get the information they want and then try and deliver a seamless customer journey between the website and then people coming in and meeting our staff, our colleagues at Motorpoint sites. So very much focused on just brand awareness, CRM, AI, enhancing SEO is all really, really important. So that is driving better returns. It's probably fair to say that, again, a few years ago, a lot of marketing money will be spent on Autotrader or TV or radio, whereas now we're getting a lot more granular, looking at things like Google paid search, but also YouTubes and social media, again, 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, both increased by over 16% last year. So that's very positive for us. We talked about margin. I've talked about pricing. This really is paying dividends. And what we've seen recently is our margins are a lot more consistent and 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 need for stock provisioning, clear the stock quicker and get a good stock turn. So that's really helped. Sell Your Car, I will talk about later, but we valued on our website, 300,000 vehicles in FY '25 -- sorry, on our website and also in store. And ancillary products. And again, we've been expanding that. We now offer a 4-year warranty product as opposed to just 1 to 3. 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. And we've managed the cost base. We've had to look at headcount requirements very closely. Pretty much every head now needs to get approval from myself and the CEO. And so we're keeping that headcount in line with where we feel the demand is and the volume. And so we won't recruit ahead of what may happen tomorrow. We're very, very focused on that. So that's a good focus. But where we have increased heads in the past year where we've gone from 710 FTEs to 779, 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. Energy costs have come down. We've moved more to open banking and reduce less reliance on bank charges, et cetera, banking card charges. So again, seeing some benefit there, which is reducing our cost base, which is good news. These are just some examples of what we're doing with the website, some of the things we've done in FY '25. We're on a journey. 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 customers, so they can add the product in, so they can see their monthly payments. New Sell Your Car journey, which again, I'll come back to. So again, that's now automated new logarithms, which makes a smooth and simple, seamless journey to value a car realistically. Google vehicle listing ads, paid search, which again is a really good way of acquiring leads and cheap cost per head. CRM investments. So we've changed our platform and -- sorry, we changed our technology on the platform, which again is delivering improved e-mail performance with customers. SEO content & PR, again, we're looking at that. SEO again has improved. Our rankings have increased and YouTube subscribers are growing, as you can see there, rapidly and a significant number of users is growing month-on-month with YouTube. And then finally, paid social. And AI technology, again, is really important, how we view this going forward and how we can get the best results. We believe that Motorpoint continues to offer the best value on Autotrader, pretty much 100% of our cars are valued at either low grade 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 trade platform, which I mentioned before. So we've got 21 stores across the U.K. on the back of improved performance last year and improved confidence in the business. We've restarted our new store opening program with Norwich, which opened in December 2024. And again, 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 are 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 M4 corridor across to Bristol, certainly around the M25 corridor. There's a couple of opportunities in the Midlands, for example, Leeds -- sorry, Nottingham and then going further north Leeds and then 1 or 2 sites potentially in Glasgow. So we've got 21 stores at the moment, but I could see Motorpoint in the next number of years, and it's difficult to say when, but you've got to wait for the opportunities to come along. But I think 30 is a reasonable number to aim for, certainly in the medium term. We target a 10% market share in the 30-minute drive times of the market that we operate in. And predominantly all the stores that we've got now, we do hit that metric. And some stores indeed are over 20% in the market, which is fantastic. 1 in every 5 nearly new used cars is sold to Motorpoint, which is a great achievement. The financial highlights. So as we can see here, I think we've touched on a few bits of this already, but we talked about revenue is up 8%. The reason that retail units were up 14% and revenue is up 8% is the mix, and we have moved to slightly cheaper vehicles, more affordable vehicles, which really reacted to some of the difficult customer confidence times that were occurring in the past 18 months. But generally, deflation is stable, 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 I think things are slightly more aligned now with the EV and its petrol diesel equivalent is more in line. We have shied away, particularly from more expensive EVs for the GBP 40,000 and above because of some of the deflation concerns. But we dip our toe in the water carefully, but we are concentrating on the EVs under GBP 20,000 now, which we believe the pricing is a bit more stable and less risk than what we have seen. Good increase in gross margins up to almost 8% from 7% a year ago, and that's really the metal margin, as I mentioned earlier, and that's helped by data, which has obviously got a big place as we grow forward. Operating expenses increased 7% mainly due to team, but also some of the new costs associated with Norwich, which opened in the second half of last year. I mentioned the FTE movement and variable costs and then finance costs as a result of the high interest rates, almost GBP 10 million of interest costs here. But what you can see is a significant improvement in profit before tax on the previous year. Very capital-light balance sheet, as I mentioned, fixed assets have grown in the year. Main driver from that is Derby. Most of our sites are leaseholds. If indeed, we have in the past, bought freehold because that's the only opportunity to get into a market, then we tend to do sale and leasebacks, and we've done that with the likes of Swans and Peterborough in recent years. Derby, the opportunity to came up to buy the store -- by the freehold, but it also gave us the opportunity. We also had some land next door to it where we could expand that pitch. So we've now got the whole site, and we'll look to sell and leaseback that over the next 12, 18 months, depending on the market. We are investing in MOT equipment. We want to bring as much of this in-house as possible. Historically, Motorpoint has been paying a third-party provider to do MOTs, which obviously has a cost implication. But I think more importantly, it's a time factor. So in the past, you may have to wait a day or 2 for the MOT to be booked in, you've got to take the car there. It may fail, then it's going to go back. where if you can do them in-house, you're in control. I mentioned inventory. You can see the inventory has grown from about GBP 100 million to GBP 150 million year-on-year, significant increase. But that clearly reflects the sales increase and the opportunity that we've got with having more stock 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 trade and other payables, which has gone from GBP 107 million to GBP 155 million. And that pretty much mirrors the inventories because we take out stocking facilities to fund the stock, which works pretty efficiently. So usually about 80%, 85% of our stock will be funded through a facility. Okay. And just -- yes, so cash outflow is quite significant in the year. I'll show a quick cash flow movement over the page, but no structural debt. We've also got a banking facility of GBP 20 million 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 GBP 9 million to GBP 7 million. EBITDA is GBP 24 million. CapEx relatively high, and that's primarily because of the purchase of the Derby freehold and the land as well. So there's GBP 4.7 million invested in Derby. Interest costs, I've mentioned, lease GBP 6.7 million. Then the GBP 4.7 million here is the first share buyback that we did of 3.5 million shares. 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 good up until January 2028 in terms of share requirements there. And then a net working capital improvement of GBP 5.4 million, giving us cash of GBP 7 million. Finance commissions, ongoing [ Saga ]. I suspect a number of you are aware of some of the background. I mean probably the latest bits to add in here is that the Supreme Court met on the 3rd of April for a few days, and their results are still awaited in terms of what they come out with. We think we will hear August, September. But again, this has just been one of those things that has dragged on. So I wouldn't want to put a mortgage on that, but it is possible. But any future potential liability compensation is believed to be the liability of the lenders are not Motorpoint. We've done nothing wrong as a dealer and simply following instructions. As you know, some of the big finance lenders have made some provisions, but we have not. And again, our disclosures have tightened up. So we always give the amount of commission earned and again, no adverse customer feedback in respect of that. So no adverse trading impact or provision requirements based on what we've seen this year. Capital allocation, as I mentioned, we do throw off cash, which is a strength of Motorpoint. 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 can grow sales, whether it be new stores or digital capabilities, then that will be a priority. And that's what we've started to reintroduce in the year just gone. But given the forecast that we've got, this will leave capital left over. As you say, we were confident enough to do a share buyback last year despite 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 -- I won't say never, but 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 least with new stores in terms of areas of the country where we still want to be. And then ESG, this is really, really important to us. We do want to be seen as the most environmentally friendly used car retailer and be a great place to work back in 2024, we were recognized by the Financial Times as one of the leaders in green and bringing for the ESG agenda. So we're very proud of that accolade. Scope 1 and 2 emissions are down -- 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 -- I always say to people treat Motorpoint money as your own or treat energy costs as your own. Would you shut that door? Would you open that window? Would you turn the aircon off, et cetera. 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 a number of pickups, et cetera. People, as I mentioned, great engagement in the top 100 -- 115 rather, Sunday Times best places to work, focused really hard on comms and culture this year, and there's more to do. But again, that's a big area for us and also diversity, equity and inclusion, which is very important. And again, we revised our policy, and that was approved by the Board in March just gone. So if I look at how Motorpoint is going to grow, I've mentioned some of this slide in a way, for those who don't know Motorpoint, this probably would have been a good slide to start with because we did show this slide about 18 months ago for the first time. And all those 4 boxes like the interest rates fall, were all red because metal margins are struggling, 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. Where we are now, I think we're halfway down that journey. So the headwinds are becoming tailwinds, which I'm happy to say. Self-help in terms of metal margin improvement has been really, really strong, and that's definitely rated 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, then we're able to pick up a lot more bulk deals than perhaps we were in the past. And we've also got some very good relationships with some of the manufacturers and fleet rental companies. So again, they've often ring Motorpoint first. We pay well. They know we pay on time, and we will take bulk product of a few hundred cars in one go, and we'll get it through our supply chain very quickly and get them on pit. So again, that's really good news to see that coming back. More to go still, but it does -- that really does help us. Market size is starting to increase, which is great, particularly the 0 to 2, 0 to 3, which is where we really want to concentrate if we have the opportunity. So again, I rated those 2 as amber. Interest rates will probably amber is red. They have started to fall, and you'd hope the direction of travel would be further improvements, albeit quite gradual. But again, every time the interest rates fall, it does improve the cost of money, and it means we've got the opportunity to bring down APRs but also our interest rates will naturally fall as the interest cost of money falls. So those 4 categories there are really big drivers in terms of moving PBT forward. So if you looked at this slide a year ago, it have been a GBP 10 million loss up to a GBP 4 million profit where some of these are starting to materialize, particularly the metal margin. And you can see now going forward, we can see more opportunity for PBT to grow. Strategy update. So there's about 6 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 GBP 400,000, GBP 500,000 -- 400, 500 vehicles a year. We buy about 3,000 or 4,000 vehicles a year. So if we can buy more cars directly from consumers, then that will increase efficiency, 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 motorway 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 bits that we're working through at the moment is just the allocation and giving customer slots to come and drop their vehicle off, get it viewed. It's quite often a vehicle -- a customer want to come in the Saturday afternoon. Unfortunately, it's the same time as we're very busy selling cars in our estate. So we need to find how we can crack that nut, whether it be more employees or whatever it might be or scheduling or encouraging consumers to come at different times or evenings or whatever it might be, but we see really, really big opportunity there. Like I say, [indiscernible] 0.5 million, and we do 4,000 cars. So we see a big opportunity to grow that number. New stores, blueprints now for the larger sites. So we have -- coming out of COVID, we opened about 4 sites that we believe are probably too small as it turns out in hindsight. If you go back to 2021, when everyone is thinking that online was the way forward, and you didn't need these big pitches to sell vehicles. We hedged our bets a little bit, and we opened up some stores with sort of between 75, 80 and 150 pitch capacity. Now those stores are still making money for us. They're doing okay, but we're never going to get to that 10% market share that I mentioned before. So we've now reverted back to larger sites to sell our vehicles from. And Norwich is roughly about 248, 250 pitch capacity. And it can also do its own preparation as well. So again, it can service its own customers directly on site. And Norwich has opened well and before central costs is making a decent profit for us. We talked about data and AI. This will be a big focus for us. We've got a very strong digital and marketing team. We've recruited quite heavily historically in that area to bring in the big brains who can really exploit the opportunities that's happening here. And again, I'm really comfortable with this area. And I think it's still a journey, but I think you can really see how we're starting 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, it's not just about TV and radio like it would have been years ago. Social media, in particular, has become very, very important. So how we engage with customers is increasingly taking focus for us. And the website is such an important destination, roughly up to 90% of our customers start their buying journey on our website. So having that website is really state-of-the-art and upfront as it can be is really, really important, giving the customers the information, whether it be to review cars or make model searches, et cetera, et cetera. So again, that continues to be a focus. Tech talks about best-in-class on the website to optimize functionality. Complete omnichannel approach to CRM for 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 can do our own in-house MOTs. But over time, we want to look at service plans, warranty work, MOTs for customers, and we're trialing that at the moment. We're looking at new systems. And this is really important, not just because it will make a decent margin for us, but because you keep the contact with the customer over that 4.5-year period, which is normally when they come to Motorpoint, 4 years later, 5 years later, they come back to buy another vehicle. But if they're coming back every year to have their car service or MOT, et cetera, we keep that contact with them. And I think we all know we walk through a show in one day, and we think we see something that we suddenly like thought of before you're thinking about that vehicle is perhaps next purchase in advance of perhaps when you might otherwise have. So again, that could be a big opportunity to grow, but the plans are excited nonetheless. So current trading, volume growth across April and May. So tougher comparators at the start of last year, but again, decent growth and profitability is growing month-on-month and year-on-year. So again, that's very encouraging. Vehicle pricing remains stable and has been generally for quite some time now. Metal margins continue to strengthen, talked about data. We have seen Sell Your Car growing year-on-year, which is the C2B channel. So again, some of the website improvements is improving 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, 84 as I mentioned. So going forward, profitable growth and responsible growth is a priority. We expect the ongoing macroeconomic pressures to generally ease, reductions in interest rates over time, but again, moderate. We are mindful of consumer confidence is still slightly uncertain in the short to medium term. And we are seeing more new supply coming back and sort of more of a slight return to normality in that front. So that's good. We continue to take market share. I think that's the really important thing for us, and we do remain optimistic for future profitable growth. So thank you. So I think that concludes the presentation.

Perfect. Well, thank you very much for your presentation. [Operator Instructions] Today, I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. 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 where it's appropriate to do so, I'll pick up from you at the end.

Okay. Lovely. Thank you for that. I think the first few, I can whiz through really quickly. We introducing dividends. Well, I think it reflects the Board's confidence in the business in terms of returning capital to shareholders. The buyback as well, I could probably say the same thing about the buyback, which we did do last year and then going forward. What can we expect? As I mentioned, a progressive dividend policy 1 penny a share. I think it's roughly about 27%, 28% of EPS. So I'd be looking in that 30%, 40% range going forward. But again, it will depend on circumstances. But as we grow profits, we grow EPS, then I would hope that the dividend would certainly follow that growth expectation. So as I say, the expectation is that dividend is here to stay. As I say, the buyback, we're on a second buyback. And again, if we have excess cash in the future, we'll make a call on what we do with that. How many stores do you hope to open and timings? I think I mentioned this probably over the medium term, up to 30, which is another 9 or 10, I guess. Timing is really, really hard. I mean, I could name about 8 sites at the moment we're looking at. Some are fairly well advanced. Some are probably -- I just know now, but they probably won't come off because of the cost of the rents or whatever. But we're continually looking at new stores, a little bit like buses, sometimes 2 or 3 will come along in one go. So it might be that we won't go -- it will go a year without opening and then it will be 2 or 3 the following year. But ideally, it would be 1 or 2 a year if we could -- if I could cherry pick and just managing the time frame between them. Newly new vehicles, recently as you've sold older vehicles, why and what is the plan? Well, the reason why we sold older vehicles -- well, there's 2 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 our returning customers were growing our new customers to Motorpoint weren't, and we weren't quite sure why. So looking at the data, we discovered that new customers tended to buy cheaper models. Now I suspect that's because they got less confidence in the Motorpoint brand than perhaps a returning customer might have. And so was more willing to spend GBP 10,000 on a car, but not GBP 20,000 or GBP 30,000. And so we deliberately went into that older stock to attract those newer customers. And what I am pleased to say is that newer customers grown as our returning customers as well. So both have contributed to the 14% retail growth I referred to earlier. Size of the price from acquiring new cars, selling cars direct from consumers, I did touch on this, but I gave you the correlation between where we are and perhaps where we are, which is obviously the market leader in the direct buying. So you'd hope that there's a big chunk of that difference that we can start chipping away at. And certainly, those are our plans. So I 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. 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, is 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 Cazoo or Cinch have, then there's about 30% of our product is going through that channel as opposed to a customer starting on the website and then going direct to a store for themselves. So it's about 70-30 is the split. What is interesting though is, obviously, during COVID, the online shot up to 50%, 60% overnight pretty much because our stores were closed, so [indiscernible] 100% for a period. But in that year, you could see that online was well over 50% for the year as a whole. When we exited COVID and then gave 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 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. Okay. So I think sort of half answered the Sell Your Car proposition. I think the improvements we have done is the tech behind it -- behind the scenes and getting your car valued and the logarithms and everything else to make sure the prices are reasonable. The 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 sell your car in from consumer. And now clearly, the Sell Your Car proposition means they can have a lot more money through commissions and bonuses that way than perhaps taking a car through Sell Your Car. So we're looking hard at how we do that. That said, we have seen about 20%, 30% growth in Sell Your Car already this year compared to last year because of some of the background stuff that we're doing, but plenty still to get over. If capital was unrestricted for the next few years, what parts of your strategy would you accelerate? And what areas would you hold back on? So I think the biggest opportunity on top of what we're already doing is the new stores, because if you can get over a 3 to 4 maturity period to 10% in every new market that you go into, that's where you're going to see significant market growth. So I think that would be it new stores. But obviously, there's a bit of a limiting factor. You can't open 3 new stores at once. You need to be sensible. But I think new stores is certainly one. We 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. I think the interesting one as well is aftersales. I think it's probably too early to say too much yet. But again, how big could aftersales be? You've got the likes of Kwik Fit, how people like that, the market leaders, and it's profitable businesses for those people. So again, 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 attract customers to the aftersales proposition. So hard to tell yet. But as I say, we're trialing it this year and putting a new system into tracking and we can start to report things like technicians and how efficient are they in speed of doing the work and all those sort of things. So that's really exciting. But again, we may want to invest to grow that quicker. Could you please provide more detail on the lease? That'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 '24, some of the -- maybe '24, the rent reviews from landlords hadn't actually come through, and they just automatically happened, and so there wasn't any documentation. So we carried on doing the IFRS 16 calculation of the right-of-use assets and the liability as we were doing. As it turns out, then there was an adjustment of about GBP 2 million historically going back, which was a gross adjustment that affected the asset value and the lease liability as well. So there's no net asset effects or profit impact. So that's correct and should be right. I certainly hope so going forward.

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, and we will publish the responses on the Investor Meet Company platform. But just before redirecting investors to provide you with their feedback, which is particularly important to the company, Chris, could I just ask you for a few closing comments?

Yes. No, first of all, thank you for investing the time. Apologies for those who perhaps know the story. And again, well, thank you for your interest previously as well. As I say, it's been -- I've been here 4.5 years. And during that time, we've had COVID, we've had the new car shortages. We've had semiconductor chip problems. We've had interest rates. We've had consumer confidence. We've had the finance commissions. We've had -- it just seems to be 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 than perhaps I was 18 months ago. And the fact is our profits now are on an upward trajectory, and we've had a good solid start, I would say, to FY '26. I feel a lot more confident now than perhaps I have been in the 4.5 years I've been at Motorpoint. And I think that's reflected and my confidence in the Board as well is the fact that we're starting to give capital back to shareholders and have been over the past 12 months now. So it does give a confidence in the business going forward. And again, pleased that we've done the dividend. I think there's still loads of opportunity to go. I keep banging on about the 97.5% of that market still to get after. So I think if we get all our ducks in the row and we do the right things, whether it be Sell Your Car, whether it be aftersales, whether it be the digital platform, the website, 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 shops and wants to operate, then I think we can continue to take some good market share going forward and hopefully deliver a significant profit increase.

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 provide your feedback in order that 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.