## There’s no car like ## a Motorpoint car Motorpoint Group PLC | Annual Report and Accounts 2023 ## ABOUT US ## Car buying ## made easy ## MOTORPOINT IS ## THE UK’S LEADING ## RETAILER OF NEARLY ## N E W V EH I C L E S . Making car buying easy has been our purpose for 25 years. It’s the reason why we have such a rich history of adapting to the needs of our customers and continually innovating to deliver the best car buying experience possible. Decades of putting our customers at the centre of everything we do has given us an unparalleled understanding of what people want when they buy a car. This is why we believe so strongly in giving our customers unrivalled Choice, Value, Service and Quality, There’s no car like a Motorpoint car. For the latest investor relations, visit our website: www.motorpointplc.com/investor-relations/why-invest/ ![img-0.jpeg](img-0.jpeg) # Strategic Report Governance Financial Statements # CONTENTS # Strategic Report 03 2023 highlights 04 At a glance 06 Investment case 08 Our business and our market 10 The Car Buyer's Champion 12 Our customers' journey 14 Market overview 16 How we deliver value 18 Chair's statement 20 Chief Executive's statement 23 Key performance indicators 24 Our strategy 29 Section 172 statement 33 Environmental, Social and Governance (ESG) 50 Task Force on Climate related Financial Disclosures ('TCFD') 56 Financial review 63 Risk management 67 Principal risks and uncertainties 73 Non-financial information-statement # Governance 76 Board of Directors 78 Introduction to governance 79 Corporate governance report 82 Audit Committee report 86 Nomination Committee report 90 ESG Committee report 93 Remuneration Committee report 94 Remuneration policy 102 Annual report on remuneration 109 Directors' report 114 Statement of directors' responsibilities # Financial Statements 116 Independent auditors' report 122 Consolidated statement of comprehensive income 133 Consolidated balance sheet 134 Consolidated statement of changes in equity 135 Consolidated cash flow statement 138 Notes to the consolidated financial statements 154 Company balance sheet 155 Company statement of changes in equity 156 Notes to the company financial statements 160 Alternative performance measures (APM®) 161 Glossary 162 Shareholder information & advisers Motorpoint Group PLC | Annual Report and Accounts 2023 01 Motorpoint Group PLC | Annual Report and Accounts 202302 Strategic Report ## 2023 Governance Financial Statements ## HIGHLIGHTS FINANCIAL HIGHLIGHTS Record turnover 2023 £1,440.2M 2022 £1,322.3M ## £1,440.2m Online revenues 2023 £660.5M 2022 £624.9M ## £660.5m Vehicles sold 2023 89.7K 2022 97.7K ## 89.7k Units sold online 2023 60% 2022 60% ## 60% Loss before taxation £0.3M2023 2022 £21.5M ## £(0.3)m Gross proit per retail unit 2023 £1,300 2022 £1,446 ## £1,300 Vehicles sourced Market share 1 | fromcustomers | 0–4 year old car market | | --- | --- | | 23.8% | 3.5% | | Average share | Ninth consecutive year in “The | 2 | 30 min drive time from store | UK’s Best Companies To Work For” | | --- | --- | | 8.9% | Top 100 | | Net Promoter Score (‘NPS’) | Our 20th store opened in Ipswich | in May 2023 ## 84 ## 20 stores 1. Based on data produced by the Society of Motor Manufacturers and Traders (‘SMMT’). 2. As per the results from The UK’s Best 100 Companies To Work For. 03Motorpoint Group PLC | Annual Report and Accounts 2023 ## AT A GLANCE OUR PURPOSE Our purpose is to make car buying easy. We’re here to help our customers buy the car they want, in the way they want. There’s no car like a Motorpoint car. OUR VISION Our Vision is to be the Car Buyer’s Champion, trusted to deliver unrivalled Choice, Value, Service and Quality. PEOPLE POWERED At our heart we are a people powered business and it is our talented people who help customers when purchasing a vehicle from Motorpoint – giving them the advice they’re looking for, ensuring everything is to the standard they expect and developing new innovations, products and services that constantly improve the purchasing process. This is evidenced by our industry leading NPS ratings. Find out more on pages 40 - 47 OMNICHANNEL AND CUSTOMER CENTRIC By focusing on making car buying easy for our customers, we have been able to create the very best omnichannel experience – one that combines the convenience and beneits of buying online, Home Delivery and Reserve and Collect with an extensive nationwide retail network ensuring high levels of quality, service and support. Find out more on page 8 04 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements ## There’s no car like ## aMotorpoint car ### Our medium term strategy is to grow revenue to more than £2bn. | Expand wholesale and | Increase customer | | --- | --- | | E-commerce channels | acquisition and retention | | Expanding our E-commerce | Increasing investment in our | | Auction4Cars.com platform and | customer proposition, marketing | | grow new supply channels. | capability and leveraging our data. | Led by online sales and fulilment capacity increase in new markets. Rapidly upscaling our Operational eiciency through E-commerce capability technology and innovation Substantial increase in technology, Further automation and technology data and marketing investment. investment as sales migrate to E-commerce channels. ### Underpinned by a commitment to: Stakeholder Our People Our Governance Risk engagement and Culture Communities Management and the Environment pages 29 - 32 pages 40 - 47 pages 44 - 45 pages 75 - 114 pages 62 - 72 05Motorpoint Group PLC | Annual Report and Accounts 2023 ## INVESTMENT CASE ## What makes ## us dierent ## Our omnichannel approach ## gives customers the choice ## of buying cars through our ## store network or online, ## or increasingly, through a ## combination of both channels. 25 years of customer insight and innovation Retail sales of nearly new vehicles – focused on those under four years and less than 30,000 miles Always low prices delivering great value Trade sales through digital auction site for vehicles not meeting our retail criteria Nationwide store network Buying cars direct from customers Inventory management, vehicle reconditioning, logistics and store operations expertise 06 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements ## Digital transformation ## providing opportunities ## for growth Customers prefer to buy used cars on an omnichannel basis, combining digital channels with physical touchpoints Relentless focus on E-commerce Increasing shift to online provides operating model opportunities Website improvements boostingtraic Signiicant investments in technology and marketing Expanding digitally led car buyingservice 07Motorpoint Group PLC | Annual Report and Accounts 2023 ## OUR BUSINESS AND ## OUR MARKET ## A Group focused on ## growth through two ## distinct brands MOTORPOINT AUCTION4CARS.COM Our retail oer of nearly new cars that are mostly Auction4Cars.com, a business to business entirely online under four years old and have completed less than auction marketplace platform, allows an eicient and 30,000 miles provides customers with an omnichannel quick route for sale of part exchange vehicles which do purchasing journey combining online with 20 retail not fall into our nearly new retail criteria. stores nationwide (at the time of publication of this report). We also oer a large range of commercial vehicles under the Motorpoint brand. ## <4 years >4 years ## <30,000 miles >30,000 miles ## Online & in store Online only Nearly new consumer vehicles Wholesale vehicles Light commercial vehicles CONSUMER OMNICHANNEL | #1 | 25 | Low | £130 | | --- | --- | --- | --- | | Value retailer | Years as a | Cost base | Lowest online | | | leading player | | average buyers’ | fees in the nearly new market ## 84 NPS Motorpoint Group PLC | Annual Report and Accounts 202308 Strategic Report Governance Financial Statements 09Motorpoint Group PLC | Annual Report and Accounts 2023 ## THERE’S NO CAR LIKE ## A MOTORPOINT CAR ## Our vision is to be the Car ## Buyer’s Champion, trusted ## to deliver unrivalled Choice, ## Value, Service and Quality CHOICE V A L U E Choice for our customers means not only the model We are able to secure the best stock at competitive and price range of available vehicles we stock, prices and we pass those savings on to our customers but also the options through which they can view, ensuring we oer stand out vehicles at unbeatable purchase, and take delivery of their vehicle such as prices. We are also able to oer market leading inancing Same Day Driveaway, Home Delivery or Contactless options and extended warranties for our customers. Collections. ## 555 99.5% makes and models in stock of vehicles priced Good, Great or Low on AutoTrader in FY23 S E R V I C E Q U A L I T Y We are car people, not sales people, and are Motorpoint Quality Standard sits at the core of our passionate about helping our customers get the right operations, ensuring we deliver the highest levels of car. We know that our customers care equally about quality of nearly new vehicles and customer service what they drive and the price they pay, and that they along the entire customer journey. Our cars are can get a car however they like – in store or online. rigorously checked from engine to exhaust by our Our customers receive Feefo Platinum award winning experts, and sold under warranty. customer service wherever and however they choose to buy their car. ## 84 Net Promoter Score OUR PEOPLE Our people are at the heart of our business, not least in ensuring the quality of the customer experience; this is why we are determined to continually focus on our team engagement. Find out more on pages 40 - 47 10 10 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements 11Motorpoint Group PLC | Annual Report and Accounts 2023 ## OUR CUSTOMERS’ ## JOURNEY ## We make car ## buying easy by ## being online ## and in store E A S Y T O FIND Store locations I N Customer agents STORE within stores Website enhancements to ONLINE help ind the right car – by lifestyle, by budget Great value – Extensive Motorpoint BENEFITS choice Price Promise Motorpoint Group PLC | Annual Report and Accounts 202312 Strategic Report Governance Financial Statements ## We have invested in creating a ## deeply embedded digital and retail ## omnichannel customer journey ## that gives the car buyer the choice ## of how to buy their next car in a ## way that its their lifestyle. E A S Y T O EASY TO BUY E A S Y T O E A S Y T O VIEW SELL YOUR CAR COLLECT CONTACT Quality, service Diverse and vast Enthusiastic team Same day driveaway and fulilment range of stock to to help customer Home delivery support both browse and test through the sales online and Reserve and collect drive process instore Buy online, collect in store Handover done in less than 30 mins | 360° virtual tour | Digital end to end journey | | | | --- | --- | --- | --- | | of the vehicle and | | Finance completed in | | | gallery of images | | privacy of own home | | | with technical | | and with access to all | | | speciications | | | information | | | | | | Payment made | | Award | | | | High | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Competitive | | Flexible | Car buying | | | | | 7 day | | | | | | | | within minutes | | winning | | | quality and | | | part exchange | | inance | service | | | | exchange | | | | | | | | | of deal being | | customer | | | standards | | | | prices | options | available | | | | guarantee | | | | | | | | | | agreed | service | | | guaranteed | | 13Motorpoint Group PLC | Annual Report and Accounts 2023 ## MARKET OVERVIEW ## The Group has made good progress on its strategic ## objectives, delivering record revenues, whilst executing ## on its investment strategy for growth, despite ## diicult macroeconomicconditions which have ## impactedproitability. ## Signiicant improvement of our market share in nearly ## new vehicles despite a fall in used car sales. | Revenues | Car market | Consumer conidence | | --- | --- | --- | | | Motorpoint’s core proposition is | During FY23 consumers faced rising | | | the sale of nearly new cars and | inlation and interest rates which | ## £1,440.2m | | commercial vans which are up to | resulted in increased uncertainty, | | --- | --- | --- | | 2023 £1,440.2M | four years old and have covered | and the resultant downturn inevitably | | | fewer than 30,000 miles. We monitor | impacted inancial performance. | 2022 £1,322.3M | available market statistics, notably | Despite this slowdown in demand, | | --- | --- | | from the SMMT (Society of Motor | coupled with supply challenges for | | Manufacturers and Traders), which | most of FY23, we still managed to | | give us transaction volumes for | signiicantly grow our share of the | Market share (0–4 year old vehicles) | | target market cars but do not include | market. Based on our customer data, | | --- | --- | --- | | | recorded mileage. We therefore | the use of digital services is becoming | | 3.5% | use the transaction volumes as a | universal amongst car buyers. Some | | | proxy for our available market. The | degree of physical connection | 2023 3.5% | | used car market continued to be | continues to be preferred by most | | --- | --- | --- | | 2022 3.1% | inluenced by the knock-on eect of | customers to provide reassurance | | | the chip shortages limiting new car | and trust in their purchase. In other | | | production. The exceptional inlation | words, UK consumers prefer to buy | | | experienced in the previous year | used cars and ancillary services on | | Size of market | subsided in FY23, and we generally | a cross channel basis, using digital | | | saw a return to more normal levels of | channels and physical touchpoints | (04 year old vehicles; source: SMMT) | | slight month on month delation. The | interchangeably on their purchase | | --- | --- | --- | | | exception related to Electric Vehicles, | journey. Looking forward, we expect | | 1.55m | where we experienced accelerated | the supply pressures to further ease, | | | depreciation in the second half of | although it is more diicult to predict | | 2023 1.55M | FY23, which impacted our margins. | the economic conditions. The war in | | 2022 1.87M | Towards the end of FY23, our new | the Ukraine unfortunately continues, | | | car supply started to improve. This | although we may expect softening | | | provided the opportunity to source | in interest rates and inlation as the | | | more vehicles directly, and this trend | year progresses. Whilst this may be | | | is expected to continue in FY24. | welcome, there is likely to be continued | pressure on discretionary spending power and consumer sentiment. However, Motorpoint, through its price leadership, will continue to oer the best value to customers and has a strong track record of demonstrating resilience in adownturn. ## 17% shrinkage in 0–4 year old market compared to FY22 (source: SMMT) 14 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements ### “ The best customer ### serviceever” Trustpilot, Motorpoint website, April2023 ## 23.8% cars retailed purchased directly from consumers ## 1,494 Big increase in the sale of Electric Vehicles (2022: 631) ## 89.7k vehicles sold, inc 32.4k via Auction4Cars.com platform 15Motorpoint Group PLC | Annual Report and Accounts 2023 ## HOW WE ## DELIVER VALUE ### Key strengths and resources ## Agility, New stores and growth opportunity We can open wherever we see a market opportunity; speed and scale are in our control. ## culture, Existing dealerships tend to be cheaper to it out. ## eiciency Breadth of stock On average 40 brands are available in store or online, spanning all the leading makes and ## Our strength lies in our ability models, sourced from multiple channels. All ## to be agile and responsive – stock is available nationally. ## in our people and our culture, Retail product oer ## and in our constant focus Our retail proposition continues to be 100% on nearly new cars and commercial vans; our ## on improving operational product oering is supported by providing ## eiciencies across our digital inance packages to our customers through our inance partners as well as oering warranty, ## platforms and retail network. insurance and paint protection products. ## Investment in technology Operational control ## is delivering operational We have no external restrictions. Proprietary IT systems can be built; we have bespoke ## eiciency. values led development and team engagement programmes; marketing can be via any channel or into any geography; our modest showroom it out costs support Motorpoint’s value proposition. Financing We are free to negotiate for the most competitive terms on the external market. Car buying Our service allows us to purchase cars direct from consumers. Depending on their age, cars can either be sold through Motorpoint (thus providing a further supply chain route), or via the Auction4Cars.com platform. ### Underpinned by our values Our operating model is focused on putting our employees irst. This means empowering our team and giving them the skills and conidence to champion the customer. We achieve this through living our core values and team commitments. 16 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements ### How we deliver for our customers Retail stores Home delivery Our retail stores oer sales, light vehicle Our customers can choose a vehicle, preparation and a large display area. arrange inance, purchase and have it All stores oer refreshment and lounge delivered to them, without having to facilities to enhance our customers’ leave their home. experience and comfort. Locations are generally positioned for ease of access and located within close proximity of a large population. Our digital contactless purchase process allows customers the option to complete their vehicle purchase in store or online, visit our store to collect their vehicle, and drive away in under H | | | | | S | O | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 30 minutes. Wherever possible, | | | | E | M | | | | | | | | R | | | E | | | | | | | O | | | | D | | | we are looking to automation to | | | T | | | | | | | | | S | | | | | E | | | | | L | | | | | L | | | | | I | | | | | | I V | | speed up the customer journey. | A | | | | | | | | | | T | | | | | | | E | | | E | | | | | | | R | Y R Retail websites Part exchanges We constantly innovate R Motorpoint generally sells S | | E | | | | | | | | E | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | to deliver outstanding | T | | | | | | | | | vehicles with less than 30,000 | | | | | A | | | | | | | | G | | | | | | | I L | | | | | | N | | | | | | customer service and we have | | | | | | | | A | | | miles, and less than four | | | | | W | | | | | | H | | | | | | a nationwide Home Delivery | | E | | | | | C | | | years old, to retail customers. | | | | | | | B | | | | X | | | | | | | | | | S | | | | E | | | | | | | | | | I | T | | T | | | | | | | | service with a 14 day money back | | | | E | | R | | | Vehicles in excess of this mileage | | | | | | | | | S | P A | | | | | | | | | guarantee to all online customers. Our | | | | | | | | and age purchased from a customer | | | | | | website allows us to maintain a convenient | | | | | | | | | as part exchange are sold through | | | | | and trusted user experience as customer | | | | | | | | our wholesale E-commerce platform | | | | | | preferencesevolve. | | | | | | | | | | | | Auction4Cars.com. | | Our upgraded imaging and vehicle speciication | | | | | | | | This platform provides invaluable live | | | | | | details provide customers with substantial information | | | | | | | | data on the latest valuation of vehicles | | | | | | on the vehicle they are researching or buying, | | | | | | | | sold through Auction4Cars.com and | | | | | | enhancing the conversion to sale on our website. | | | | | | | | allows us to oer the best price to our | | | | | | MyMotorpoint, our customer portal, allows customers | | | | | | | | | customers for their part exchange. | | | | to complete all documentation requirements online, enabling Home Delivery and faster handovers in store. This is proving popular with our customers. Proud Supportive We are proud of what we do, how we do it and We have a one team ethos and understand the people who make it happen. We stand out that together we achieve more. We are a from the crowd and are proud to work as part united team focused on a common goal and of Team Motorpoint. vision and will always help our customers and colleagues alike #drivingdreams®. Happy Honest We enjoy what we do and we show it – a This applies to our teams, investors and smile is contagious and our teams wear them customers. Courage and honesty are the naturally with pride. A happy team makes for vehicles for positive change and Team a better working environment which in turn Motorpoint has embraced this. translates to a great customer experience. 17Motorpoint Group PLC | Annual Report and Accounts 2023 ## CHAIR’S STATEMENT ## Motorpoint is focused on ## growth and transformational ## improvement INTRODUCTION | I have been with Motorpoint for 17 | I have highlighted below my thoughts | Both sides of the market, sales and | | --- | --- | --- | | months and am impressed by what | on the current landscape of the UK’s | supply, have recently experienced | | the Group has achieved against a | used car market, strengths of the | intensiied competition. New car | | challenging macroeconomic and | Motorpoint model, and why I believe | franchises have shifted more | | industry backdrop. To have delivered | there is an opportunity for Motorpoint | attention to used cars to cover for | | record revenues of £1,440.2m and | to continue gaining market share | lower new car production, new | | increased market share to 3.5% in | and, as the UK economy normalises, | online-only sales models have | | its target market of 0–4 year old | substantially grow proit. | emerged, and constrained used | | vehicles is to be commended. The | | car supply has caused all players | | company faced rising inancing | Market context | to compete more aggressively for | | costs, constrained stock availability | | stock from all sources. | The UK used car market is highly and pricing shocks to Electric fragmented among branded new Vehicle inventory, but nevertheless The growth of the online channel car franchises, local and regional was able to continue to make a and use of contemporary used car dealers, and emerging number of important strategic technology presents an opportunity, online companies. The industry’s car investments. Although greater at least in theory, to disintermediate sales practices are fairly entrenched, yearly proitability was expected the used car market by selling direct organised around a physical store early in the year, our stated goal has to consumers through a lower cost, model with high costs, and generally been to invest in growth and new higher service model, by buying not favoured or well trusted by strategic capabilities to the extent direct from consumers or via new consumers compared to other possible while remaining proitable. online marketplaces, and by building retail shopping experiences. The Although the company eventually brand leadership and market share supply side of the used car market made a small loss in a diicult through aggressive marketing. is similarly unchanged for most trading environment, I am pleased used car dealers. It has traditionally with theprogress made. Used car competitors can respond to been limited to part exchanges, this opportunity in a range of ways, purchases o lease, bulk purchases from building a basic-catalogue type from OEM manufacturers and website to spending massive money rental leets, and purchases from on technology and marketing on a wholesale trade marketplace. ### “ As Motorpoint continues to improve its omnichannel ### customer experiences and data-driven processes, ### and to invest in more effective marketing and store ### expansion, its brand awareness, market share, sales ### and proits should rise, creating a substantially ### bigger and more proitable business.” John Walden Chair 18 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Value creation Motorpoint is today one of the best operators in the UK’s used car market, as measured by its strong margin per car sold while simultaneously providing a lowest price promise, and industry leading NPS. With over 25 years of experience, it has proven its superior pricing models and market-leading eiciency in inventory management, vehicle re-conditioning, logistics and store operations. Motorpoint is using technology to further reduce costs across business processes and operations, including to relect the cost saving opportunities an online only model in hopes that This innovative customer experience, in stores and call centres from scale can eventually cover central coupled with Motorpoint’s price increased consumer take-up of costs and show proit. We believe and service oer, should provide a Motorpoint’s improved digital services. that Motorpoint and its strategic leading proposition in the market. approach are uniquely positioned In the near term we expect the market to become a leader in this changing Growth for used cars in the UK to continue used car market and thereby grow to be diicult due to, among other Motorpoint has seen its market revenues and proit substantially. things, softened consumer demand, share grow with increased brand limited stock availability and high awareness. Importantly, we also Customer proposition inancing costs. However, we believe see this awareness grow where Motorpoint will emerge from the Based on our customer data, the we have a local store presence. current depressed consumer market use of digital services is becoming Where Motorpoint has stores and a more eicient and competitive universal amongst car buyers and has deployed targeted marketing business having made progress sellers. However, some degree of programmes, its mature market on multiple key strategic initiatives physical connection continues to share of 0–4 year old vehicles is in technology, marketing, and its be preferred by most customers 8.9% compared to 3.5% nationally. digital and physical channels. Over to provide reassurance and trust the long term we will make further in the transaction. In other words, The proitability proile of a investments, oset to a degree by UK consumers prefer to buy used Motorpoint store is also favourable. eiciencies across the business. As cars and ancillary services on a Historically, in a normalised Motorpoint continues to improve its cross-channel basis, using digital economic environment a new omnichannel customer experiences channels and physical touchpoints store turns proitable in its second and data-driven processes, and to interchangeably in their purchase year and at maturity can generate invest in more eective marketing and journey. Similarly, consumers proit in excess of £2m-£3m per store expansion, its brand awareness, prefer a cross-channel approach to annum. With ongoing improvements market share, sales and proits selling their cars, as online sources to its digital and store customer should rise, creating a substantially provide pricing and other data while experiences, and expanded and bigger and more proitable business. a physical connection is required improved marketing, we believe that to validate and collect the vehicle. Motorpoint’s mature and national I would like to thank all of my Motorpoint, as an omnichannel market shares can be higher and its colleagues at Motorpoint, at our retailer, is perfectly positioned to timeline to maturity accelerated. Head Oice and across the UK serve this need and is developing network, for their continued hard integrated consumer journeys to Motorpoint has stores in 20 market work and commitment. Whilst the provide a digital channel, store sales regions and believes up to 25 current macroeconomic environment and service channel, and home markets are targets for future stores, and car industry pose challenges delivery and collection options, leaving ample growth opportunity. for our company and UK consumers underpinned by sophisticated data, With national brand awareness, a face signiicant uncertainty, I remain that allows customers to learn, shop strong digital oer and an expanded excited by the opportunity in front of and build conidence and trust in network of service points, we would us and conident that Motorpoint is their purchase or sale and helps expect market share outside of store well positioned to deliver signiicant Motorpoint know just what degree catchments to grow as well. shareholder value in the long term. of assistance is needed at each stage of the journey. John Walden Chair 14 June 2023 19Motorpoint Group PLC | Annual Report and Accounts 2023 ## CHIEF EXECUTIVE’S STATEMENT ## There is a signiicant ## opportunity for Motorpoint ## to become a larger, highly ## proitable market leader ## Good progress against strategic objectives, with ## strong advancements in technology, store expansion ## and resultant market share growth. INTRODUCTION Overview I am pleased that we achieved Rapidly rising inlation, consumer record revenue of £1,440.2m, up uncertainty and worldwide vehicle During FY23, we continued to 8.9% on FY22, of which £660.5m supply chain challenges are execute on our investment was derived from E-commerce sales signiicantly aecting the used car strategy to oer our customers a (FY22: £624.9m). This was helped market. For example, the market for truly holistic experience when it by vehicle mix and inlation, but we our 0–4 year old sector has fallen comes to purchasing a used car, also achieved meaningful market from a pre Covid high of 2.45m sales with guaranteed access share gains in a smaller market due per annum to 1.55m. to our outstanding price to investment in new geographical leadership proposition. areas, digital and technology In addition, higher interest rates capability, and price leadership. also resulted in lower inance commissions where we chose not | As previously highlighted, | to pass the full cost increases onto | | --- | --- | | we experienced a number | customers, and our interest costs of | | of headwinds in FY23, which | £7.1m more than doubled from FY22. | impactedproitability. ### “ We are the UK’s leading ### omnichannel used vehicle retailer, ### investing for signiicant, proitable ### long term growth.” Mark Carpenter Chief Executive Oicer 20 Motorpoint Group PLC | Annual Report and Accounts 2023 ![img-1.jpeg](img-1.jpeg) # Strategic Report Governance Financial Statements 84 Net Promoter Score In a year we have stocked over 555 models 8.9% market share within 30-minute drive time of a store (0–4 year old car market) As a result of our strong performance in key strategic areas, the Group has made good progress on these targets. Since the objectives were announced, the Group has benefitted from high vehicle inflation and car mix, increasing the average selling price per vehicle; however, challenges in availability and then weaker demand in the used car market has materially hindered unit sales growth. In the year, our share of the 0–4 year old market increased to 3.5% (FY22: 3.1%, and from 2.4% when the strategy was launched), whilst market share within 30 minute drive time of a store increased to 8.9% (FY22: 7.7%). There is clear correlation between market share and unprompted brand awareness. Margins were also eroded by the well-documented fall in Electric Vehicle prices in the latter part of FY23 with as much as a 30% reduction in stock values over a four month period. These factors influenced the reduction in profitability, resulting in a loss before taxation of £0.3m, down from a profit of £21.5m in FY22. Despite these headwinds we consciously continued to execute our planned investment in strategic objectives, which cost an incremental £6.1m in FY23. We have worked hard during the year to manage non-strategic costs, and headcount at year end had dropped to 794 (FY22: 928), even with the opening of new stores. Our cash position has improved significantly since the end of FY22, despite the lower profitability. Net cash, excluding lease liabilities, at year end was £5.6m (as set out on page 100), compared to net debt of £(21.2)m in FY22. This was largely due to the use of the stocking facilities, which allowed full repayment of the £29.0m revolving credit facility during the first few months of FY23. We believe that there is a significant opportunity for Motorpoint to become a larger, highly profitable market leader in a changing and fragmented market. This will involve investments over time in data-driven technology, digital and store customer experiences, and growth including marketing and store expansion. In the shorter term, the business is expected to benefit from the increase in new car registrations, therefore expanding supply. ## Strategy update In June 2021, we announced our objectives to significantly increase our rate of growth, with the aim of at least doubling FY20 revenue to over £2bn in the medium term by: - Growing our E-commerce revenue to over £1bn by substantially increasing investment in marketing, technology and data. - Opening 12 new sales and collection stores to service revenue growth, increasing investment in the customer proposition, and expanding our supply channels. - Leveraging our E-commerce platform Auction4Cars.com to accommodate new supply channels and to launch our marketplace offering. - Increasing operational efficiency through further automation and technology investment as customers migrate to E-commerce channels. Two more new stores opened successfully in FY23, namely Edinburgh and Coventry. Both are in strategically significant regions, and we are pleased with their performance. Ipswich, our 20th store, opened in May of this year. While difficult trading conditions remain, we will pause our new store rollout programme, as we concentrate on investment that offers the best near term return. During FY23, we have made rapid progress enhancing our digital capability. We are seeing the benefits of hiring an experienced Chief Digital Officer, who has built up an in-house digital team, with a significant increase in digital sales leads. We also opened our new state-of-the-art Tech Hub in Manchester to help us attract the best talent in the digital industry as we enhance our online presence. Our website has been subject to much investment, and now includes a new, lifestyle inspiring landing page, improved search workings, imagery, product information, drop down functionality and a more premium look and feel. In addition, work has been progressing quickly on integrating marketing platforms, SEO enhancements, targeted brand awareness and communication. Motorpoint Group PLC | Annual Report and Accounts 2023 21 ## CHIEF EXECUTIVE’S STATEMENT CONTINUED | and eCRM capability. These | and in store customer journey. The | ESG Committee is fully operational | | --- | --- | --- | | enhancements are all designed to | focus currently is on improving | and has been instrumental in setting | | improve the customer journey and | customer experience, and how we | out appropriate ESG targets. We | | increase eiciency. | can serve them even better, linking | want to be viewed as the most | | | their in store experience to online | environmentally friendly used | | We continually enhance the way | research. How customers shop | carretailer. | | in which we use data to make | with us is becoming increasingly | | | informed decisions, particularly with | interchangeable between channels. | During FY23 we have had a | | regard to how we price vehicles. | | speciic focus on ‘GHG emissions | | Our capability has been bolstered | | and reductions’, ‘recycling, | Our team with the introduction of Tom Tang waste recovery and reductions’, Our operating model of how our who joined Motorpoint as Chief and ‘energy use, conservation employees and stakeholders Technology Oicer in March. Tom and reductions’. We delivered a interact, the Motorpoint Virtuous has over 20 years of experience 7.3% reduction in energy usage Circle, combined with our Values in technology leadership with his per square foot compared to of Proud, Happy, Honest and recent roles as CIO, Alliant Energy, FY22, and waste to landill was Supportive continue to provide a Sainsbury’s and Argos. Tom is practically zero (0.2%). Also, water robust framework for explaining an advocate of the beneits of AI consumption fell by 15.4% in the how we get things done and what capabilities which beneit both the year. Working towards these targets factors to consider when decisions customer and employee. A key focus has seen us make good progress are required. for the business has been the use of in data availability, visibility, and automation to improve eiciency, awareness across the business. During the year, we introduced whether it be making things easier Throughout FY23 we have remained new and improved tools to help us for customers in store and on the committed to energy management, attract and retain the best talent website or automating back oice championing this through including a new careers website functions. Automation progress will internal communication channels and e-applicant tracking system, further accelerate as Tom settles which promote and incentivise an onboarding tool and a powerful into the business. energyeiciency. internal communication platform. We are already seeing the beneits The investment that we undertook From an Electric Vehicle (EV) of attracting top talent and we were in FY23 was to build a market leader. standpoint, FY23 saw us make pleased to receive an increased This included future-prooing substantial progress upgrading our number of applicants for positions the business, providing us with estate to support this expanding part at our new store in Ipswich. enhanced technology capabilities to of the market. We sold 137% more improve our customer proposition EVs this year compared toFY22. We believe that the engagement and automation to drive eiciencies, of our team is directly correlated both of which help us to withstand Outlook to our customer satisfaction, and tougher market conditions. The As already mentioned, rising we sponsor multiple initiatives to Group is now better positioned inlation and interest rates, enhance their experience with for the future, and we are in a consumer uncertainty and vehicle Motorpoint. Our ‘One Big Dream’ position to scale back on our supply challenges signiicantly initiative has been a huge success, investment spend, utilising these aected the used car market and with our people using two paid new capabilities, and focus only impacted our inancial performance hours per month for their own on pursuing the most impactful in FY23. However, Motorpoint fulilment. We are proud to have strategic investments. has a strong track record of again been selected in the UK’s 100 demonstrating inancial resilience in Best Companies to Work For, our Customers a downturn, with market share gains ninth consecutive selection. As we innovate our omnichannel and an ability to eectively manage customer experiences, our highly cash resources. This ability will allow At my senior team level, with the engaged team continued to deliver the Group to continue investing introduction of Kal Singh, Chief our market leading proposition prudently in our strategic objectives. Operating Oicer, in December of Choice, Value, Service and The Group expects to emerge in and more recently, Tom Tang, Quality to our loyal customers with a normalised market as a leaner Chief Technology Oicer, in March, an unerring focus on customer and more valuable business ready I believe that all the building satisfaction. Our NPS for sold to seize a signiicant opportunity. blocks are now in place to further vehicles remains at a record high 84. Our short term focus is on cash accelerate our strategic objectives. conservation by increasing margin During FY23, we introduced Project and lowering our cost base, which Environmental, Social and One, which is Group wide, and looks will improve proitability. Governance (‘ESG’) at how Motorpoint will operate in the The Group has made signiicant Mark Carpenter future to seamlessly join our online progress on its ESG strategy. The Chief Executive Oicer 14 June 2023 22 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report ## KEY PERFORMANCE INDICATORS Governance Financial Statements NONFINANCIAL KPIS ## It’s important that Estimated sales from 4, 8 digitalleads ## we measure our ## 21.1k 2023 21.1K ## performance 2022 19.3K FINANCIAL KPIS | | | 2 | | | | 2 | | | | | 4 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenues (£m) | | | | Gross proit (£m) | | | | Market share (0–4 year old market) | | | | | £1,440.2m | | | | £85.7m | | | | 3.5% | | | | | 2023 £1,440.2M | | | | 2023 £85.7M | | | | 2023 3.5% | | | | | 2022 £1,322.3M | | | | 2022 £106.3M | | | | 2022 3.1% | | | | | 2021 £721.4M | | | | 2021 £62.5M | | | | 2021 2.4% | | | | | 2020 £1,018.0M | | | | 2020 £78.9M | | | | | | | | | 2019 £1,058.7M | | | | 2019 £79.9M | | | | | | | | | | | | | | | | 2 | | 3 | | | | Gross proit per retail unit | | | | (Loss) / Proit before tax (£m) | | | | Net Promoter Score | | | | | £1,300 | | | | £(0.3)m | | | | 84 | | | | | 2023 £1,300 | | | | 2023 £0.3M | | | | 2023 84 | | | | | 2022 £1,446 | | | | 2022 £21.5M | | | | 2022 84 | | | | | 2021 £1,254 | | | | 2021 £9.7M | | | | 2021 83 | | | | | 2020 £1,152 | | | | 2020 £18.8M | | | | 2020 81 | | | | | 2019 £1,150 | | | | 2019 £22.2M | | | | 2019 78 | | | | | | | | 2, 5 | | 2, 7 | | | | | 6 | | | Net Cash/(Debt) (£m) | | | | ROCE | | | | Number of stores at year end | | | | | £5.6m | | | | 17.3% | | | | 19 | | | | | | | | 2023 £5.6M | 2023 | 17.3% | | | 2023 19 | | | | | | £21.2M | | 2022 | 2022 74.6% | | | | 2022 17 | | | | | | | | 2021 6.0M | 2021 52.7% | | | | 2021 14 | | | | | | | 2020 £0.8M | | 2020 96.5% | | | | 2020 13 | | | | | | | | 2019 £13.8M | 2019 96.2% | | | | 2019 12 | | | | | 1 Deinitions of terms can be found in the | | | | 5 Cash less borrowings, excluding lease | | | | Two new stores opened in FY23 taking | | | | | Glossary on page 161. | | | | liabilities (as set out on page 160). | | | | our total stores up to 19, and a 20th | | | | | 2 The KPIs for FY19 have been restated | | | | 6 Number of open stores at year end. | | | | store opened in May 2023, improving | | | | following the adoption of IFRS 16 in FY20. | | 7 Operating proit relative to the average of | national coverage. | | --- | --- | --- | | 3 The 2021 data is based on H2 of that | opening and closing net assets (as set out | | | year, which is considered to be more | on page 160). | | representative due to lockdowns during 8 Based on number of reservations, test the COVID-19 pandemic. drives, and enquiries originating from 4 Data not tracked on a like by like basis for digital channels. the full ive year period. 23Motorpoint Group PLC | Annual Report and Accounts 2023 ## OUR STRATEGY ## The Car ## Buyer’s ## Champion ## Our strategy remains to grow ## revenue to more than £2bn ## in the medium term. This will ## be delivered by continued ## focus on our customer, ## ensuring we meet their ## needs and demands online ## while delivering the highest ## levels of service, quality and ## support through our growing ## nationwide retail network. ### “ The strategy has proven successful ### despite challenging headwinds. ### As a consequence of the fall in ### new car production, our market ### has shrunk, although we continue ### to take a greater share of our ### available market.” Mrk Crpenter Chief Executive Oicer Motorpoint Group PLC | Annual Report and Accounts 202324 Strategic Report Governance Financial Statements ### Good progress was made in the year against the four pillars of our strategy. | Rapidly upscaling our | | Increase customer | | | --- | --- | --- | --- | | E-commerce capability | | acquisition and retention | | | • Experienced CTO joined in | | • Appointment of a brand | | | | March2023 | | new position, Customer | | • New tech roles recruited, | | | ExcellenceDirector | | | with focus on developers and | • Two new stores in FY23 and | | | | thecloud | | afurther store in May 2023 | | • Future roadmap for our | | • Share of voice growth and | | | | techstack | | improved brand awareness | | • Data science solutions | | • Price leadership maintained | | | | delivered enhancing marketing | • Growth in MyMotorpoint | | | | performance, and supply and | | accounts | demand insights • Increased product choice • Digital journey improvements forcustomers including the development of a • Focus on social media full end to end purchase journey • Project One launched to further on our website improve customer experience at • Improved email engagement all touchpoints metrics, such as higher • New brand advertising campaign click through and lower launched in December 2022 unsubscriberates • More frequent and targeted email communication • New tech hub launched in Manchester store – help attract best talent | Expand wholesale and | | Operational eiciency | | | --- | --- | --- | --- | | E-commerce channels | | through technology and | | | • Further investment in | | innovation | | | | infrastructure, technology | • Further development | | | | andbrand marketing | | of QCapp to measure | | • Car buying service is a fully | | | preparationeiciency | | | automated digital irst operation | • Prep time improvement from | | | • Website enhancements to | | | 9.4days to 8.3 days (0–4 | | | improve customer journey | | yearoldcars) | | • Auction4Cars.com operates | | • Automated payments solution | | | | as an automated digitally led | | launched | | | marketplace | • New telephony collaboration | | | • Low purchase fees for dealers | | | platform launched | • Enhancements to encourage customers to complete journey online, freeing up timeforemployees • Headcount fall supported byautomation and customer self-serve 25Motorpoint Group PLC | Annual Report and Accounts 2023 ## OUR STRATEGY CONTINUED STRATEGY PERFORMANCE FOR 2023 ## Upscaling our ## E-commerce capability ## Investment into our technology, data, ## E-commerce capability will accelerate ## future growth | Motorpoint’s visibility in Google’s | Link to strategy | | | | --- | --- | --- | --- | | search listings is up over 176% year | | Rapidly | Operational | | | | upscaling our | eiciency through | ### on year, capitalising on investment E-commerce technology and ### in the website, content and capability innovation ### marketing teams. ### High performance digital team ### FY23 highlights now embedded • Impact of recruitment of experienced Chief Digital Marketing Digital Oicer and new Chief Technology • In-housing of team drives advanced thinking Oicer joined in March 2023 andtechniques • New technology capability building; focus on • Signiicant reduction in operating costs compared product development, engineering and cloud tooutside agencies • Data science increasingly driving business decisions Product • Insight driven paid media strategy based on • Opportunities to increase sales, improve customer key data sources, to drive cost eiciencies and excellence and generate business eiciencies deliver growth • Reduction in development time through product • More frequent and targeted email ownerspartnering with engineering teams communications and digital activity • Development of new site features and functionality to • Digital & Tech Hub launched in Manchester create seamless online and oline Customer Experience store – will support and attract the best talent in a range of digital roles Content and Design • Recruitment of a new Digital Marketing Director and a team of digital marketing • Content team recruited to drive SEO through written experts covering a range of channels including and video content paid search, Search Engine Optimisation • In-house User Experience and User Interface teams (‘SEO’), email, digital PR and social media recruited to test and enhance Customer Experience • Build of an in-house content production team, covering everything including content writers, editors and video producers | 21.1k | +12.5% | | --- | --- | | Estimated sales | Mobile traic | | from digital leads | Year on year Q4 | | 2022: 19.3k | growth | 26 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements STRATEGY PERFORMANCE FOR 2023 ## Growing our ## market share ## Creating a true omnichannel ## experience for customers ### Market share growth as customers Link to strategy ### repeat purchase at a location and Increase customer ### brand awareness increases in acquisition and ### newregions. retention | FY23 highlights | | 8.9% | | --- | --- | --- | | • New brand proposition launched in December | | market share | | | 2022 focusing on our product quality and | (within 30 mins) | unbeatable prices – There’s no car like a Motorpoint car • Multichannel awareness driving campaign launched on Christmas Day • Six new market area locations since October 2021 (at time of publication of report) • New branches accelerate market share in | | newmarkets | • Customer Board introduced – to enhance | | | --- | --- | --- | --- | | • Price leadership linked to signiicant market | | | customer experience and KPIs | | | outperformance | • Project underway to establish how Motorpoint | | | • Increased product choice for customer | | | will operate in a future omnichannel world – best | | | (SKUunique mix over 80%) | | service, best customer experience, seamless | website and branch experience; remuneration • EVs sold up 137% compared to FY22 packages modiied to drive market share further | 3.5% | 20 | | --- | --- | | Market share | Stores nationwide | | (0–4 year old car market) | (at time of publication of this report) | 2022: 3.1% 27Motorpoint Group PLC | Annual Report and Accounts 2023 ## OUR STRATEGY CONTINUED STRATEGY PERFORMANCE FOR 2023 ## Operational excellence ## Operational eiciency through ## technology and innovation Link to strategy Operational eiciency through technology andinnovation FY23 highlights • Eiciency improvements in store, preparation and back oice functions • Automation supporting headcount reduction, despite increases in digital capability and newstores • Ongoing review of remaining manual processes to establish what can be automated, along with customer self-serve • Further development of QC app helped time taken to prepare a car by 12% from previous year • Store LFL headcount reduction following automation and customer self-serve • Company-wide procurement review launched providing cost saving beneits • As well as website enhancement, projects include Salesforce CRM, IT hardware refresh, networks upgrades and new Collaboration platform to enhance customer service ## 12% reduction in preparation time on 0–4 year old cars in FY23 28 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report ## SECTION 172 STATEMENT Governance Financial Statements ## Our stakeholders at ## the heart of our model ## The Board has a duty to promote the long term, ## sustainable success of the Company and of the wider ## Group. The baseline duty is set out in section 172 of the ## Companies Act 2006, but in reality, it is broader and ## the Board considers a wide range of statutory and ## other factors within its decision making process. Board decision making will always encompass: We recognise that our success as a business is closely • the likely consequences of any decision in the long linked to the wellbeing of the communities in which we term and the risks to the Group and its stakeholders; operate, and we are committed to being a responsible, • the interests and wellbeing of our people and the sustainable member of our local communities. communities where we are present; We regularly review our policies and procedures to • the impact of our vehicles and business on the ensure that they are in line with our obligations under environment and the need to ‘decarbonise’; Section 172 and that they continue to eectively take • the Group’s relationships with its customers and into account the needs of all our stakeholders. suppliers; and • the importance of our reputation for integrity and This Section 172 statement signposts in more detail high standards of business conduct. some of the key ways in which we have engaged with stakeholders across the year ended 31 March 2023 and Motorpoint believes that a key mechanism in ensuring built conidence in the sustainability of their relationship that it makes good long term and sustainable decisions with the Group. It should be read in conjunction with: is open, two way dialogue with all our key stakeholders. • the Chair’s statement on pages 18 and 19 We believe that understanding the perspective and • the Chief Executive’s statement on pages 20 to 23 needs of our stakeholders is vital to the Group’s success. • the ESG report on pages 33 to 49 Good governance, our business ethics and integrity are • the Chief Financial Oicer’s review on pages 58 to 61 essential to continue to be an attractive company for our • the Risk landscape from pages 62 to 72 investors, employer for our employees, partner for our • the Governance and related reports from pages 76 to suppliers and retailer for our customers. page 114 We have a code of conduct in place for all employees, which sets out our expectations for ethical behaviour and responsible decision-making. We also have a dedicated customer care team that is focused on ensuring that our customers are satisied with the service we provide. In addition to this, we have also established several community initiatives to support the local communities in which we operate. 29Motorpoint Group PLC | Annual Report and Accounts 2023 ## SECTION 172 STATEMENT CONTINUED ENGAGING WITH OUR STAKEHOLDERS Engaging and understanding the needs of our key stakeholders has never been more important and is critical to the Board’s decision making. Outcomes and how | Stakeholder Why we engage How we engage | | | feedback reaches the Board | | | --- | --- | --- | --- | --- | | Our people | We have an experienced, | • b-Heard annual engagement | • b-Heard results and annual people | | | | diverse and dedicated | survey twice a year, February | | plan presented to the Board at | | | workforce which we recognise | and September | | January Board meeting | | | as a key asset of our business. | • Conducted a DEI survey in | • Have held various SLT sessions on | | | | Therefore, it is important | September 2022 | | DEI, with an external DEI specialist, | | | that we continue to develop | | | creating our strategy and SLT | • Launched Workplace – our new the right environment and commitments internal communications platform Company culture to encourage – to improve communication • Continued to oer health and and create opportunities for between teams and across wellbeing initiatives with mental, individuals and teams to realise thebusiness physical and inancial support their full potential. • We have set up a designated • We committed to ensuring we pay session for all stores and team at least the Real Living Wage members to receive dedicated • People reports at scheduled Board monthly time with the Senior meetings Leadership Team (‘SLT’), driving • Annual pay review and reports to more engagement across the the Remuneration Committee who whole business with the SLT approved an additional “Cost of • Training and talent development Living” pay review in January 2023 programmes that are now a mix of • We’ve invested in salary levels in key in person and online strategic areas of the business and • Monthly SLT/CEO listening groups raised the Motorpoint living wage in called “Ask me Anything” carried line with the national living wage out across the country • Designated NED (Non Executive pages 40 - 47 Director) overseeing workforce engagement and ensuring updates are provided to the rest oftheBoard | Our | We’re here to help our | • Direct feedback sought on a | • High NPS score | | --- | --- | --- | --- | | customers | customers buy the car they | regular basis via NPS (84 in FY23), | • Strong repeat and referral business | | | want, in the way they want. | Feefo (Platinum rate) and Google | | • Use of data to better understand Our Choice, Value, Service reviews customer needs, and addressing and Quality proposition is • Monitoring/reporting of sales, these reliant on having the right footfall, website traic and internet • Customer research is informing partnerships to enable us to search analyses the development of a vehicle and deliver for customers. We have • Dedicated customer care team customer data proile an unerring focus on customer • Social media and websites satisfaction. • Project launched to improve all aspects of customer journey • Direct contact in stores Our suppliers It is crucial that we develop • Standard terms of business and • CEO and Senior Management Team and partners and maintain strong working regular supplier meetings focus on supply chain challenges relationships with our • Contingency planning should there arising from expanding into new suppliers, so we can enhance be a failure in the supply chain channels and suppliers the eiciency of our business • Engaging with a broad range of • Supplier and distributor and create value, and make suppliers and regular transition onboarding due diligence sure we treat suppliers in line between channels, with a (inancial, quality, business with our values and ethical similar level of lexibility in integrity and compliance, standards. We continually ourproductoering component supply, modern assess our supplier and slavery, etc) • Further strengthening of supply partner network, and leverage • Ongoing management of supplier chain team and processes both internal and external relationships expertise to ensure appropriate • Procurement review undertaken to relationships and fair assess how we improve eiciency economics. 30 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Outcomes and how Stakeholder Why we engage How we engage feedback reaches the Board Our Our employees care deeply • We have appointed a Sponsorship, • Awards and recognition communities about our communities. As a Partnership and Charity Manager • Sponsorship and volunteering responsible employer, we want who leads our community activity byemployees to contribute to the economic and investment initiatives • Continuing with our community development and sustainability • We hold a number of partnerships focused partnerships which cement of our communities. and subscriptions to support our contribution to the economic underrepresented groups e.g. development and sustainability of Automotive 30% Club (Gender), these communities Stonewall (LGTBQIA+), 55 • Raising funds for local charities Redeined (Age) close to our stores across the UK • Entered into partnerships to create • We support payroll giving to allow better gender balance within the team members to support charities automotive industry that are important to them, many of • Commitment to invest in the which will be local successful and sustainable delivery of careers and education for young pages 44 - 45 people in our local communities • All team members are entitled to paid time o to support volunteering in the community Our As a company with a premium • Annual Report • The Board is provided with regular shareholders listing on the London Stock • Consultation with lead investors feedback on investors’ views and Exchange’s Main Market, and voting advisory organisations market developments we need to communicate • Face to face and virtual meetings • RNS announcements clearly and eectively with with investors • Annual General Meeting our existing and prospective • We issued regular trading updates • Investor presentations shareholders to develop via the RNS facility to update the • Corporate website their understanding of how market on the inancial performance the Group’s businesses • Roadshows arranged twice a year of the business are managed to generate to engage with investors • Our websites (www.motorpointplc.com sustainable returns and long • Investors have the opportunity and www.motorpoint.co.uk) provide a term success. to visit stores and meet a range broad range of information and data ofemployees • Monthly reporting on shareholdertrading Our Through channels such as • Expanded monitoring of our GHG • ESG Committee at PLC level to environment climate change and increasing emissions and ongoing reduction/ oversee ESG matters legislative requirements, the osetting activities to support our • Environment is a key pillar of the natural environment aects eorts to reduce the impact of our ESG Committee many aspects of what we do. emissions • Sustainability Manager whose role Our own materiality research • Continuous monitoring of our includes the implementation of also shows that the importance waste and implementation of environmental projects of environmental concerns improvements to reduce waste • Formal ESG strategy in place rated highly among our other to landill while increasing our with three key areas linked to our stakeholders. As a business, overallrecycling environment we need to do what we can to • Engagement with third parties who • Environmental performance support our environment to provide expertise measures included in annual report ensure a sustainable business. • Ongoing implementation including waste and GHG emissions and exploration of water savingprojects pages 34 - 39 • Continued consideration into reduction and oset of our indirect environmental footprint, such as products sold 31Motorpoint Group PLC | Annual Report and Accounts 2023 ## SECTION 172 STATEMENT CONTINUED HOW WE MADE OUR KEY DECISIONS Below we set out how we considered the interests and needs of stakeholders in two of our key decisions this year. Decision 1: Cost of living support Recognising the challenges facing many of our employees due to the cost of living crisis, it was agreed to bring forward the increase in base salaries to be in line with the Real Living Wage from 1 April 2023 to 1 January 2023. In bringing forward this pay increase, we considered: The long term Our people are a key asset to the success of the business, and supporting them through the eect cost of living crisis will help to retain talent in the business. Aected Customers and consumers stakeholder The retention of our talent leads to a better customer experience, and increases the level of groups repeat purchases due to stronger relationships. Employees It was recognised that the cost of living crisis was impacting many colleagues in the business, and the Board considered various ways in how to best support those through this challenging period. Bringing forward the increase to the Real Living Wage would allow employees to beneit immediately from an increase to their pay. It was noted that progression opportunities would also be created to support career development pathways. Investors Investors are increasingly focusing on the alignment of executive pay and the wider workforce, and have shown their support for companies who are introducing cost of living measures. Decision 2: Continued investment into stores As part of our strategy to increase market share and boost our omnichannel approach, we took the decision to open new stores in Edinburgh and Coventry, taking our number of stores nationwide to 19 at year end. A further store in Ipswich opened in May 2023 bringing our total stores up to 20. In opening these stores, we considered: The long term Growing our market share and increasing our brand awareness will allow us to deliver long term eect sustainable and proitable growth. Aected Customers and consumers stakeholder The locations of our new stores mean that we are able to be closer to customers and increases groups the number who live within a 30 minute drive. This helps to give greater choice when deciding on their next car purchase. Employees Our continued investment to deliver on our strategy helps to motivate our employees across the business, demonstrating the long term view being taken despite the challenging environment currently being faced. Investors The new stores help to accelerate market share in new markets, supporting our growth strategy as customers purchase at new locations and brand awareness increases. This increase in market share will lead to longer term sustainable and proitablegrowth. Community Each of our stores engages with a local charity that resonates not only with the sta of that store, but also with the local community. Opening new stores allows us to further deliver on our social impact and supports our charity strategy. 32 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report ## ENVIRONMENTAL, SOCIAL Governance Financial Statements ## AND GOVERNANCE ### Driving ### sustainability: ### “ Our commitment ### to ESG is a key ### consideration in all ### decisions we take at ### Team Motorpoint” Mark Carpenter Chief Executive Oicer Our commitment to sustainability and responsible corporate citizenship has been a focus point in the year with the aim of Environment, Social and Governance (‘ESG’) to be considered in everything we do. We take this responsibility very seriously and the Board’s ESG committee oversees all work that we do in this area. In this section, you will ind a comprehensive overview of our ESG initiatives, strategies and achievements over the past year, as well as our plans for the future. We believe that ESG performance is not only important for the long term success of our business, but also for the betterment of society and the environment asawhole. Environment FY23 Summary: An overview of the targets we set in the year and our progress Pages towards them alongside key changes and further steps we aim to take in 34 – 35 futureyears. Waste management: An overview of our waste management strategies, including Page 35 our approach to reducing, reusing and recycling waste. We will also report on our progress towards our waste reduction targets and provide information on how we are working to minimise our impact on the environment. Energy and water usage: We recognise the importance of minimising our use Pages of natural resources and are committed to reducing our carbon footprint. This 35 - 36 section will provide data on our energy and water usage, as well as an overview of our initiatives to reduce our consumption and improve our eiciency. Emissions data: We understand that the automotive sector is a signiicant Pages contributor to greenhouse gas emissions, and we are committed to playing our 36–39 part in reducing this impact. In this section, we will provide data on our emissions from our operations across our Scope 1, 2 and 3 footprint. Social Social responsibility: We believe that social responsibility is a key component of Pages our ESG performance, and we are committed to supporting our team members, 40– 47 customers and the communities in which we operate. This section will provide an overview of our social initiatives including our commitment to diversity and inclusion, community outreach and employee wellbeing. Governance Governance: We recognise that good governance is essential for building a Pages sustainable and responsible business. In this section, we will provide an overview 48 – 49 of our governance framework, including our approach to risk management, board composition and diversity, and ethical business practices as well as our TCFD aligned disclosures. 33Motorpoint Group PLC | Annual Report and Accounts 2023 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED ENVIRONMENT FY23 Summary During FY23 we adopted our irst Throughout FY23 we have remained internal intensity ratio as a KPI for committed to energy management, During FY23 we had a speciic focus monitoring our emissions and driving championing this through our on the following three environmental sustainable business growth. The internal communication channels factors: metric is deined as our total Scope promoting and incentivising • GHG emissions and reductions 1 & 2 and Business Travel divided by energy eiciency throughout our • Recycling, waste recovery the total loor area of the business organisation. While FY22 saw some and reductions (tCO 2 e/loor Area – sq ft). This metric infrastructure changes such as the • Energy use, conservation helps us deliver more accurate like completion of our switch to LED and reductions for like comparisons with previous lighting, FY23 has seen us focus years and is disclosed in our SECR on data accuracy, reporting and This year, we set ambitious targets statement later in this section. targeted engagement resulting in focusing on the core aspects of our successful reduction in like for the environment that are most While we strive to make like energy usage against FY22. important to our stakeholders. improvements and reduce the Our goals were to achieve a 10% impact of the business on the We have also enhanced the reduction in like for like energy environment, we have also ensured governance in this area with usage vs FY22; and achieve zero we adhere to the relevant regulatory our Board level ESG Committee waste to landill by the end of FY23. standards and compliance conducting several meetings in the We are pleased with the progress obligations. The third phase of year, chaired by Adele Cooper, as made against the targets in the year, the Government’s energy saving well as an internal ESG Committee full details can be found on page 35. opportunities scheme (‘ESOS’) was continuing to meet regularly, successfully undertaken during actioning and delivering governance Working towards these targets FY23 and was complete early in over our key ESG priorities. has led us to make great strides FY24. In addition, we now have in improving data availability. We fully aligned with the Task Force on now calculate regular footprints Climate related Financial Disclosures internally for periodic reporting (‘TCFD’). Finally, in line with our and track energy and water usage prior year reporting we continue to monthly on a store by store basis. adhere to the SECR requirements. 34 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Also core to our ESG framework is the need to adapt to customers as buying trends move to favour more sustainable products. Whilst Electric Vehicle ('EV') sales had well documented challenges in FY23 we still expect increased demand for EVs in the future. This not only extends to adapting to a rise in the EV market, but also making sure we stay ahead of any incentives that local authorities currently offer, or may offer in the near future. FY23 saw us make substantial steps to upgrading our infrastructure to support the market for EVs. We installed charging stations at our vehicle preparation centres to alleviate our reliance on the national EV charging network. Additionally, our Coventry branch now has customer EV chargers live, and we plan to install additional charging stations at further stores, including Ipswich. In addition to our own internal improvements, we have continued to work closely with local authorities to support customers in making environmentally conscious decisions. Our Birmingham and Oldbury stores continue to operate as the exclusive dealerships for Birmingham City Council's scrappage scheme, offering people working in the clean air zone the chance to scrap their old car and receive £2,000 credit towards a compliant vehicle or a mobility credit. ### Waste management During FY23, we continued to prioritise our efforts towards improving our data capture, resulting in the ability to complete a full year on year comparison for the first time thanks to our continued partnership with Go-Green. We experienced an increase in total waste generated compared to FY22, due to the expansion of our activities through new store openings and store refurbishments conducted in the year. The store refurbishments also led to an increase in waste generated per square foot of the business compared to FY22, as these activities generate a higher amount of waste than business as usual operations. Despite the volume of new store openings and refurbishments, our continued partnership with Go-Green ensured that we reduced our waste to landfill figure to a minimal level. Additionally, we have increased the percentage of waste recycled to 85.6% indicating our steady progress towards pushing our waste up the waste hierarchy to minimise its impact on the environment which in turn has impacted the waste recovered percentage which reflects the higher proportion of waste recycled in the period. | Total waste figures | FY23 | FY22 | | --- | --- | --- | | Total Waste | 1,062.9t | 948.2t | | Kg Waste / sq ft | 1.28 | 1.24 | | Percentage waste recycled | 85.6% | 81.0% | | Percentage waste recovered | 14.2% | 18.1% | | Percentage waste to landfill | 0.2% | 0.9% | ### Energy usage During FY23, our use of electricity increased by 9.8% owing to our increased footprint as well as increased consumption due to the increase in EV charging points in the business. Whilst electricity has been a challenge, we have seen a steady decline in our reliance on gas supplies with some examples of gas supply point usage dropping to almost zero in FY23. We have seen a 10.5% reduction in total gas usage vs FY22, leading overall to a 0.3% increase in total energy usage, which is a pleasing result given the overall increase in the portfolio of stores in the business. This overall reduction equates to a like for like 7.3% reduction in our usage when compared to the relative square footage of the business year on year, which represents good progress against our stretch target of 10% like for like reduction in FY23. Total electricity and gas usage | | FY23 | FY22 | % change | | --- | --- | --- | --- | | Total Electricity kWh | 5,269,331 | 4,799,812 | +9.8% | | Total Gas kWh | 3,811,120 | 4,256,690 | -10.5% | | Total Energy | 9,080,451 | 9,056,502 | +0.3% | | kWh / sq ft | 10.94 | 11.80 | -7.3% | ![img-2.jpeg](img-2.jpeg) Motorpoint Group PLC | Annual Report and Accounts 2023 35 ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED # Energy Saving Opportunities Scheme ('ESOS') ESOS is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. The Environment Agency is the UK scheme administrator, with all ESOS reports submitted to them directly. Organisations that qualify for ESOS must carry out ESOS assessments every four years. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures. Following its introduction in 2014, the scheme is currently in its third phase of reporting with the compliance period starting from 31 December 2022. We have already met this deadline and the report generated contains a number of potential areas for us to focus on, assisting with our journey to net zero. # Water use and reduction Invoiced water usage is now tracked monthly, on a per location basis. This is a significant data improvement over previous years and will help us on our path with actionable data to help us use water more sustainably across our operations. During FY23 we achieved a 15.4% reduction in total water usage across the business. One of the factors in achieving this water reduction has come from our work with HSG UK who were appointed in FY22. This year we have benefitted from reduced consumption, with the added benefit of utility bill savings and an improved washroom experience for our people and our customers. During FY23 we surveyed our Sheffield and Derby stores. The findings showed that the urinals operated on a standard fill and flush system, which usually flush in 15-minute intervals, adding up to 96 flushes per day. We compared this to HSG's Ureco system which reduces flushes to 4 per day, potentially saving over 300,000 litres of water per year, per cistern. Furthermore, we discovered that urinal blockages were not unusual and could be eradicated by Ureco's patented design. As such, we completed a business wide rollout during the second quarter this year and as a result we have seen our average monthly water usage drop by from 2,150 m³ in FY22, to 1,820 m³ in FY23. "Invoiced water usage is now tracked monthly, on a per location basis. This is a significant data improvement over previous years." # Emissions data Greenhouse Gas emissions and reductions As highlighted by our ESG materiality assessment, GHG emissions and reductions are the highest priority area of focus for the business. The increased data accuracy and reporting with regards to our energy usage directly corresponds to our GHG emissions, and as such we have been tracking our Scope 1 and Scope 2 emissions periodically to enable reporting at relevant forums such as the ESG Committee. In addition to periodic calculations for our direct emissions, FY23 has seen us look at the wider Motorpoint value chain. In line with our TCFD commitments in FY22, we have calculated our applicable categories of Scope 3 emissions. ![img-3.jpeg](img-3.jpeg) # Streamlined Energy and Carbon Report (SECR) FY23 This SECR information report has been compiled in line with the March 2019 BEIS 'Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance', and the EMA methodology for SECR Reporting for all measured emissions from activities which the organisation has financial control over. The carbon figures have been calculated using the BEIS 2022 carbon conversion factors for all fuels. 36 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements ### “ As highlighted by ### our ESG materiality ### assessment, GHG ### emissions and ### reductions are the ### highest priority ### area of focus for ### the business.” The table below sets out Motorpoint’s emissions in FY23 with prior year comparatives: Total waste igures FY23 FY22* Total energy use covering electricity, gas, other fuels and transport (kWh) 11,892,362 10,862,971 | Scope 1 emissions generated through combustion of gas (tCO | | | 2 e) 695.68 779.66 | | | | --- | --- | --- | --- | --- | --- | | Scope 1 emissions generated through use of transportation (tCO | | | | 2 e) 594.65 472.09 | | | Scope 2 emissions generated through use of purchased electricity (tCO | | | | | 2 e) 1018.98 1019.14 | | Scope 3 emissions generated through business travel (tCO | | | 2 e) 157.38 265.10 | | | | Total Scope 1 & 2, Business Travel (tCO | 2 e) 2,466.69 2,535.99 | | | | | | Intensity ratio – Total Scopes 1 & 2, Business Travel (tCO | | 2 e/Floor Area – sq ft) 0.00297 0.00330 | | | | Note: Disclosures above are aligned with the SECR minimum mandatory requirements for quoted companies: Global Scope 1 emissions from combustion of gas / fuel for transport purposes and Global Scope 2 emissions from purchased energy. Additional disclosure of Scope 3 emissions from business travel or employee owned vehicles is included. Motorpoint plc operates within the UK only. * Our FY22 utility usage has been restated following reissued invoices by utility providers relecting increased emissions. For reference the previously disclosed tCO2e for Scope 1 combustion of gas and Scope 2 emissions generated through the use of purchased electricity were 618.35 and 959.50 respectively, with the increased intensity ratio and total updated for the increased total emissions. 37Motorpoint Group PLC | Annual Report and Accounts 2023 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED Our relative footprint decrease for combustibles and purchased energy in Scopes 1 and 2 relects the success of our store sustainability forums, with engagement with store management to apply reduction strategies at their respective stores. Scope 3 emissions With GHG emissions being a priority focus under our ESG framework, a detailed understanding of our emissions is vital. Up until recently our focus has been on the emissions from our direct operations under Scope 1 and Scope 2 of the GHG protocol. While these emissions are more directly under our control, they oer only a snapshot of total emissions footprint as opposed to the emissions of our entire value chain under Scope 3. There are a total of 15 categories deined by the GHG protocol for Scope 3. Of these 15 categories, we have established that nine additional areas not in our SECR reported emissions above that are relevant to Motorpoint’s value chain. Based on these categories, we have calculated our emissions using the most appropriate method with the data available to us, recognising that reliable data for Scope 3 is a challenge and we are on a journey to improving our understanding in this area. Particular focus was put towards the calculation of emissions from products sold, as this category | Our SECR reported emissions for | | | As noted earlier in the energy usage | | makes up the majority of our entire | | | --- | --- | --- | --- | --- | --- | --- | | Scope 1 and 2, Business Travel | | | section, our electricity consumption | | footprint across Scope 1, 2 and 3. | | | decreased 2.7% from 2,540 tCO | | 2 e in | increased from 4,799,812 kWh in | | For categories less material to the | | | FY22 to 2,467 tCO | 2 e in FY23. On an | | FY22 to 5,269,331 kWh in FY23. | | business due to their reduced totals | | | intensity basis, taking into account | | | However, location based emissions | | of tCO | 2 e, we have calculated them | | the portfolio size of the business, | | | associated with the purchase of | | using a range of industry accepted | | | our emissions intensity decreased | | | electricity stayed consistent in tCO | 2 e | data and estimates. | | | by 10.0% from FY22 to FY23. | | | terms due to the lower UK emissions | | | | factor for grid electricity in 2022 compared to 2021. 38 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements A full breakdown of our category justiication and calculation methods ### “ For the irst time can be found on our investor website. ### in FY23, we set Percentage Total category of Motorpoint ### ambitious targets Motorpoint Scope 1, 2 and 3 emissions emissions footprint ### aimed at focusing on Total Scope 1 emissions 1,290 0.28% ### the core of the most Total Scope 2 emissions 1,019 0.22% | Scope 3 emissions | important aspects of | | --- | --- | | Category 1 Purchased Goods and Services 12,311 2.63% | environment for our | | Category 2 Capital Goods 317 0.07% | stakeholders.” | Category 3 Fuel and Energy 478 0.10% Category 4 Upstream Transportation 5,588 1.19% Category 5 Waste 213 0.05% Carbon osetting In FY23 we have committed to Category 6 Business Travel 157 0.03% osetting our emissions disclosed Category 7 Employee Commute 395 0.08% via SECR for Scope 1 and 2 through Category 8 Upstream Leased Assets N/A N/A purchasing carbon credits. Category 9 Downstream Transportation 1,181 0.25% Progress against targets: Category 10 Processing of Sold Products N/A N/A For the irst time in FY23, we set ambitious targets aimed at focusing on Category 11 Use of Sold Products 445,954 95.11% the core of the most important aspects Category 12 End of Life Treatment of Products N/A N/A of environment for our stakeholders. Category 13 Downstream Leased Assets N/A N/A These were: • achieve 10% reduction in like for Category 14 Franchises N/A N/A like energy usage vs FY22; and Category 15 Investments N/A N/A • achieve zero waste to landill by Total Scope 3 466,595 99.5% the end of FY23. Total Scope 1, Scope 2 and Scope 3 emissions 468,904 100.0% As noted in our energy usage section, Motorpoint achieved a 7.3% reduction on a like for like basis with its energy usage. Whilst we are pleased with obtaining this result, we recognise there is more to do in this area and will be using the indings from the phase 3 of our ESOS report to support the continuation of this target moving forward. With respect to zero waste to landill, we were pleased to achieve just 0.2% of our waste going to landill, whilst narrowly above the 0% target, owing to necessary site refurbishments. We are conident we can continue to further reduce the waste going to landill in FY24. 39Motorpoint Group PLC | Annual Report and Accounts 2023 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED SOCIAL From the very beginning, Motorpoint This year we have appointed To embed health and safety has been a people focused business Callidus to provide comprehensive practices in the wider workforce, – and our team members have always consultative support and advice to we ensure that all our employees been at the heart of our business managers at all levels for health and receive health and safety training model and our Virtuous Circle. safety matters across the Group. modules as part of a two year Callidus report monthly to the Board training cycle. Completion is We have always stood up to be the on all key health and safety issues. monitored centrally and late Car Buyer’s Champion, making sure The Board requires that the Group completers are notiied to their line our customers can buy a quality systematically manages its health manager on a monthly basis. nearly new car with no hassle from and safety hazards, sets objectives a trusted business that does things and monitors progress by regular Our people in the right way. Then there are the measurement, audit and review. Our people have always been communities that we work within. the heart of our business. Our Wherever we do business, we want Managers and supervisors achievements this year can be to bring high quality employment across all levels in the Group are attributed to our talented teams to the community through our responsible for managing the who worked in line with our Values, team members and their families, health and safety of their teams as demonstrating real resilience but more than that we want to be part of promoting and embracing through a challenging year. Our a positive force for good, helping a positive health and safety people have made sure that our those less fortunate, supporting culture. The Board emphasises customers have continued to those starting out in life, facilitating the importance of individual receive industry leading service as opportunities and generally making responsibility for health and safety demonstrated by Feefo / Trustpilot; sure that wherever we trade, the at all levels of the organisation, our preparation teams have looked community is a better place for and expects employees to report after thousands of cars, ensuring having Motorpoint nearby. potential hazards, to be involved that there’s no car like a Motorpoint in implementing solutions and to car; and at Head Oice, our teams Health & Safety adhere to rules, procedures and have supported the wider business The Board recognises that the Group policies. A key element in the and accelerated our strategic highest levels of safety are required in continuous improvement of health digital transformation journey. Our order to protect our employees and and safety management is sharing approach to developing a high customers. The Board believes that all best practice and lessons learnt performing and inclusive culture incidents and injuries are preventable, from incidents across the Group is achieved through a number of and that all employees have the right and the wider industry. Accidents, initiatives and is explained on the to expect to return home safely at the incidents and near misses are following pages. end of every working day. investigated, with actions generated to prevent recurrence. 40 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements OUR PEOPLE  FY23 HIGHLIGHTS | 73 | 4.3 | 794 | 97 | 205 | | --- | --- | --- | --- | --- | | Promotions | Glassdoor | Team | Long Service Awards | New hires | | | rating | members | Spread across 5, 10, 15 and | | | | (out of 5) | | 20 years’ service awards | | ### “ Being able to share insight, networks and time with schools to help make ### their career services meaningful will deliver a more sustainable and positive ### landscape for everyone. Many young people, through no fault of their own, do ### not have the opportunity to experience what careers may exist for them and ### the Cornerstone Employers’ network can help change that.” Cat Moseley, Chief People Oicer | Our Values | Our Values were updated and | Diversity, Equity and Inclusion is | | --- | --- | --- | | We are proud | have been in place since 2018 | a key enabler to achieving our | | We are proud of what we do, how | and they continue to be a true | strategic goals. The more diverse, | | we do it and the people who make | relection of how we work together | equitable and inclusive we are, | | it happen – we stand out from the | at Motorpoint. In November 2021, | the more successful we will be at | | crowd and are proud to work as part | we launched our Leadership | attracting, retaining and developing | | of Team Motorpoint. | Behaviours, demonstrating to | a diverse workforce. The more | | | leaders at all levels across the | diverse, equitable and inclusive we | | We are supportive | business what good leadership looks | are, the easier it will be for us to | | We have a one team ethos and | like at Motorpoint and what we, and | connect with and serve our diverse | | understand that together we achieve | our team members, expect from a | customers. Dierent perspectives | | more. We are a united team focused | Motorpoint Leader. These have been | allow us to make better decisions. | | on a common goal and vision and | embedded across our processes | | | will always help our customers and | to bring them to life and make sure | Doing nothing in respect of being | | colleagues alike #drivingdreams®. | that we keep these front of mind. | a diverse, equitable and inclusive | company is not an option, and We are happy Diversity, Equity and Inclusion without it we limit our potential. We enjoy what we do and we show This extends to our people, our We want everyone to be proud to it – a smile is contagious and our customers, our investors and the work for Motorpoint. We want to teams wear them naturally with wider communities we operate in. make sure that there is respect for pride. A happy team makes for dierence and there’s true inclusion a better working environment Everything we do is focused on at every level of our workforce, and which in turn translates to a great making Motorpoint a place where for our customers, right across the customer experience. everyone feels valued, respected, UK. We believe that everyone should and supported to be their best – be welcomed and treated equitably We are honest creating role models who display by being given the same chance of We speak the truth and give honest our values to each other and to success, whoever they are, whatever feedback at all times; this applies to ourcustomers. they do and wherever they’re from. our teams, investors and customers. An inclusive culture at Motorpoint Courage and honesty are the is our aim, a culture where our vehicles for positive change and values Happy, Honest, Supportive Team Motorpoint has embraced this. and Proud underpinned by working Together are more than words but We do all of this together are demonstrated by all of us each We are equal parts of the whole and every day. and we are stronger together. 41Motorpoint Group PLC | Annual Report and Accounts 2023 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED Our Approach to Diversity, Cornerstone Employers’ We assumed the role of a lead Equity and Inclusion network – continuing to employer for SEND schools and are proud of the work we have started Our approach to which will enhance support the next generation doing with Project SEARCH as a our strategy to create an even more We continue to be a Cornerstone Local Enterprise Adviser. Project inclusive culture of support and Employer for the Careers and SEARCH helps young people from togetherness. Enterprise Academy. A Cornerstone across Derbyshire with dierent Employer is a business that is invested forms of learning disabilities to Our Commitments in the successful and sustainable gain new skills as well as practical, 1. As a Senior Leadership Team we delivery of careers education for work based experience through will lead by example. young people and commits to join a a structured personalised study 2. We will create an inclusive culture. leadership group of local businesses programme as they look to make 3. We will attract, retain and develop to support the schools, colleges and successful transitions from school a diverse Motorpoint team. young people in their area. to a productive adult life. 4. We will create more diverse voices around the senior We maintained our partnership In 2022, we appointed our irst Early leadership table. and delivered a signiicant number Careers Partner who is actively 5. We will create more customer of initiatives throughout the engaged in the Cornerstone network and community connectivity. year, including the Open Doors and has improved our activity in this programme (which gives young area. In November for example we people the opportunity to take presented to nearly 300 pupils about part in a series of sessions to gain the potential career opportunities an insight into our business, meet oered by the automotive industry. employees and complete work related tasks), reverse jobs fairs to Partnership with the improve employability skills, as well Automotive 30% Club as a virtual employment project with Special Educational Needs and We have continued our membership Disabilities (‘SEND’) students. and support of the Automotive 30% Club. The Automotive 30% Club undertakes a range of campaigning and lobbying work and has inspired many in the automotive industry to get behind a range of gender balance initiatives and educational programmes for young people regardless of gender. Members of 55 / Redeined We are members of 55 / Redeined who are a champion for the over 50s by challenging the status quo and advocating for age diversity, positivity and inclusion across all areas of life. 42 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements ![img-4.jpeg](img-4.jpeg) ### Gender Pay Gap The Gender Pay Gap is the difference between the average pay of men compared to the average pay of women, and is expressed as a percentage difference. In calculating these figures, the Mean figure is a sum of the hourly pay rate for all women in the organisation divided by the total number of women. We then repeat the process for men and the pay gap is the difference between the two. The Median gap is calculated by listing the hourly pay rates for each of the two groups and taking the middle amount (the median). We then subtract the median figure for the women's group from the men's, divide it by the men's median hourly pay rate and multiply by 100 to get the percentage. | | Mean | Median | | --- | --- | --- | | Total Pay Gap | 18.1% | 3.4% | | Salary Pay Gap | -1.8% | 0.2% | | Bonus Pay Gap | 65.7% | 28.2% | Although we have made some great progress in closing our Gender Pay Gap through the development and recruitment of females into leadership roles, we acknowledge there is still some work to be done to further close our Gender Pay Gap. For comparison, the average median pay gap in the UK stands at 9.4%. We will continue to ensure equality across our key leadership roles; an area of opportunity is our Sales Executive demographic. As only 9.5% of our Sales Executives are female, the average hourly pay for this group sits within our Upper Quartile. ### Gender mix | | Male | Female | | --- | --- | --- | | Senior Leadership | 8 (73%) | 3 (27%) | | Leadership | 27 (73%) | 10 (27%) | | Manager | 66 (72%) | 26 (28%) | | Team Member | 518 (79%) | 136 (21%) | | All employees | 619 (78%) | 175 (22%) | All roles at Motorpoint are eligible for a performance related bonus which means that the vast majority of our team received a bonus in the last 12 months, irrespective of their gender. The bonus pay gap which we have reported can be related to the gender split across the quartiles, especially in the upper and upper middle quartiles, where bonus is relative to base salary and where fewer females occupy the highest earning roles. The Gender mix table sets our gender breakdown at various levels in the Company, including the breakdown for all employees, based on the 794 individuals employed as at 31 March 2023. Motorpoint Group PLC | Annual Report and Accounts 2023 43 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED | Our gender mix is in line with the | Charities were supported by event | The Community Hero initiative was | | --- | --- | --- | | wider automotive industry but we | sponsorship support, enabling them | created, and run on social media | | always want to improve and lead the | to raise needed funds by actioning | where the public could vote for their | | industry, hence our involvement in | the event. As examples: St David’s | local heroes to receive the prize on | | the Automotive 30% Club and an | Hospice has raised over £100k, | oer – Newport based foodbank | | increased focus on graduates and | Prince of Wales over £80k, Demelzas | was gifted Cardi arena tickets, | | apprentices who generally provide | £20k, St Roccos, £25k, St Cuthberts | and 20 children were mascots at | | a better gender mix for team | £60k, and JPC farm £200k through | Peterborough FC. | | members joining us. | our commitment to supporting them | | | | and event sponsorship. | National level | Motorpoint in the community On a national level, all stores were Arena tickets have been donated This year we have signiicantly listed as drop o locations for to various non associated store increased our support and Operation Christmas Child. The charities for their own fundraising involvement in the many public dropped o their donations activities with a collective total of communities in which we work. for the Xmas Box appeal in store. The over £2k raised. campaign was a huge success with Local level 1,223 boxes being delivered to stores Our stores were oered as an event across the country and collected by This year we reworked our charity venue for their own events instead the Samaritans. Next year we hope to strategy. We realised that it was of us holding our own event raising amplify the campaign and encourage important to engage with a local funds for the charities. This was sta to get involved using their charity per store that resonates not trialled at Christmas with Myton volunteer days at the various box only with the sta of that store but Hospice Coventry and Prince of sorting locations. also the local community. Working Wales Hospice Castleford, both with 19 charities has not only raising over £5k at the event with Each quarter we now have a increased the store team charity Motorpoint providing not only the nominated charity on Workplace, our engagement but also built a greater venue but also the Santa’s grotto people community’s platform, where relationship with Motorpoint and so additional funds could be raised ticket rale funds are sent. This has each of the communities. through ticket sales. been a new initiative that has seen great support and as an example, we raised over £300 for African Adventures at the end of theyear. 44 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Store Charitable partner Sponsorships Birmingham Birmingham Children’s Hospital Birtley St Cuthbert’s Hospice Burnley Pendleside Hospice Burnley Golf Centre Castleford Prince of Wales Hospice Snaith Football Team Chingford Yardley School Coventry Myton Hospice Derby Derby County Community Trust Motorpoint Arena Nottingham Nottingham Lions Wheelchair Basketball Derby County Community Trust Panthers Ice Hockey Power Break Edinburgh St Columba’s Hospice Glasgow & Motherwell Beatson Cancer Care Calderbraes Football Team Maidstone Demelzas Childrens Hospice MPE Football Team Manchester St Ann’s Hospice Salvo Autism in Racing Newport St David’s Hospice Care Newport FC Academy Victor Karlaker – Bristol Pitbulls Chloe Higgs – Ice Skater Oldbury Birmingham Children’s Hospital Birmingham Hospital RugbyTeam Peterborough Sue Ryder Hospice Care Portsmouth Pompey in the community Sheield St Luke’s Hospice Elsecar Main Football Team Stockton on Tees JPC Community Farm Swansea Maggies Cancer Care Morristown Football Club Riley Powell – Pool Player Widnes James Bulger Memorial Trust / StRoccos Hospice ### “ This year we ### reworked our ### charity strategy. ### We realised that it ### was important to ### engage with a local ### charity per store ### that resonates ### not only with the ### staff of that store ### but also the local ### community.” 45Motorpoint Group PLC | Annual Report and Accounts 2023 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED Team member level Alongside the b-Heard survey, every manager in the business with more We recognise that our team members than three direct reports receives have busy lives and diering priorities an individual management rating outside of the workplace. Many known as MC3. This provides of them will have causes that are feedback to every manager on how close to their hearts and personal to they Motivate, Consider, Converse them. To support them with this, we and Care for their teams. This year continue to oer all colleagues the we will also be combining the opportunity to donate to these causes manager’s feedback with our new via PayrollGiving. Leadership Behaviours and have completed a 360 review based on Doing the right thing these behaviours for every manager for our people in the business. Our aim is to ensure At Motorpoint we believe that the we are supporting our managers in combination of our focus on driving becoming truly best in class leaders. dreams, robust ESG credentials and our people and culture, not only As well as surveys, the Senior dierentiates us from our peers but Leadership Team (‘SLT’) spend a also gives us a competitive advantage. signiicant amount of time in stores speaking to colleagues at all levels. We believe that Motorpoint is an This year we launched “Ask me amazing place to work but we Anything” listening sessions where constantly strive to become an even members of the SLT held feedback better place to work. The Virtuous sessions across the country helping Circle is at the very heart of the way us understand the issues faced we do business as we genuinely by our team members and hence believe that if we get it right for improved the experience for our our team members, they will get it team members and customers. right for our customers and that will | create stronger performance for | Learning and development | We are also increasing our focus on | | --- | --- | --- | | all of our stakeholders. We are very | Following the pandemic, which | apprenticeships and early careers. | | proud to have been listed in Best | impacted our Learning and | This year we have appointed our | | Companies’ ‘Best Places to Work’ list | Development (‘L&D’) activity during | irst Early Careers partner whose | | for nine consecutive years. | 2022 we have consolidated, reviewed | aim is to rapidly expand our | | | and relaunched our learning and | apprenticeship oer across the | | To ensure that we maintain our focus | development oer for our team | business. In a world where vehicle | | on team member engagement and | members. Our team members are | maintenance / preparation skills | | genuinely live our values Proud, | the start of our Virtuous Circle and | are in short supply we see this | | Happy, Honest, Supportive and | our ability to develop their skills, | as a key part of our strategy to | | Together, we undertake a wide range | capabilities and their careers is a key | build a leading team. We are also | | of team member focused activities, | part of the attraction of working for | developing apprenticeship oers | | some of which are as follows: | Motorpoint and ultimately will impact | across the business and functions. | the service levels experienced by | Listening to our employees | ourcustomers. | Wellbeing | | --- | --- | --- | | We have taken part in the Best | | The wellbeing of our team members | | Companies b-Heard survey for the last | At Motorpoint we have developed a | has always been important to us at | | nine years and this gives us high quality | blended approach to learning and | Motorpoint. Happy and Supported | | feedback from our team members | development to ensure we meet the | are two of our Values and our focus | | on what they like about working for | many dierent L&D requirements | on the Virtuous Circle means we are | | Motorpoint and, more importantly, | of our diverse team base. We have | naturally concerned about how our | | where we can improve. This year, | online learning options for both | colleagues are feeling emotionally, | | we ran two surveys for the irst time | mandatory training and to support | physically, mentally and inancially. | | and we achieved a 1 Star (very good) | developmental needs. We have | | | accreditation. Of course, the important | a range of face to face options | We have invested in mental health | | thing about an engagement survey | covering more leadership skills | irst aid (‘MHFA’) training and have | | are the actions that you take as a result | and we actively encourage a one | made it compulsory for all managers | | of the feedback and at Motorpoint all | to one coaching approach at a | in the business to be trained as well | | areas of the business are expected to | management level. | as training further team members in | | create an Action Plan based on their | | each of our sites to be able to oer | | team feedback and are measured on | | support locally when needed. | delivery against those plans. 46 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements | Our One Big Dream scheme gives | across a wide range of subjects | This provides opportunities to | | --- | --- | --- | | the gift of time and lexibility, and | that may be impacting their lives | grow and develop personally and | | allows an individual to take time | and gives potential access to face | professionally and that brings us all | | out, once a month, fully paid, to do | to face counselling if required. We | the way back to the Virtuous Circle | | something that matters to them. | also provide inancial support via | and our Motorpoint Values. | | In FY23 we oered over 20,000 | Sovereign Healthcare to all team | | | hours of additional paid time o | members for key health treatment | “A friendly, supportive, happy | | to our employees as part of this | including optical support, physical | workplace culture that has values | | scheme. We only ask that employees | therapy and dental care. | aligned with all employees that | | do something that will genuinely | | work here. Open to feedback and | | drive their happiness. This beneit | We have recently relaunched | sharing ideas. The beneits are | | has received immensely positive | our beneits platform My M.O.T. | excellent – food purchased by | | feedback and has been used across | (Motorpoint Oers and Treats) | Motorpoint every month, team | | an array of activities. The diversity | and have upweighted our focus | nights out once a quarter, cheap | | of people’s selection demonstrates | on wellbeing by oering our team | car inance rates, a great Christmas | | just how important it is to apply the | members a wide range of beneits, | party and excellent pay/Bonus | | lexibility to our employee beneits | discounts, access to materials and | package. Cycle to work and the | | in order to have a real impact on | advice on physical, mental and | healthcare package are also fab | | personal wellbeing. We also give | inancial wellbeing areas. | beneits. Motorpoint value you and | | extra leave for birthdays, moving | | anything that’s bothering you can | | house and getting married. | Of course, one of the best ways | be discussed on monthly 121s with | | | to ensure our team members’ | manager. My wellbeing is put irst | | We continue to partner with | wellbeing is to provide high quality | and the onsite Mental Health First | | Sovereign Healthcare to provide | jobs that reward people well, | Aider is not something I’ve seen at | | a 24-hour employee assistance | providing fulilling and enjoyable | any other places I’ve worked” | | programme for our team members. | work in a supported environment | | | This provides a counselling hotline | with quality managers and leaders. | Car Prep | | for team members with issues | | Service Agent – Glassdoor | 17 January 2023 47Motorpoint Group PLC | Annual Report and Accounts 2023 ## ENVIRONMENTAL, ## SOCIAL AND GOVERNANCE CONTINUED Treating Customers Fairly GOVERNANCE Treating Customers Fairly (‘TCF’) is a regulatory requirement and applies We take our governance to all regulated irms in the conduct responsibilities seriously and are of their business. The Financial committed to promoting a culture Conduct Authority (‘FCA’) regards within Motorpoint where everyone fair treatment of customers by irms does the right thing and always as a key part of FCA regulation in the acts with integrity, aligned with retail market. our shared values. We require all employees and third parties TCF is a core foundation of who act on our behalf to conduct delivering our retail proposition of business with integrity, and to take Choice, Value, Service and Quality, personal responsibility for ensuring and is thereby fundamental to that our commitment to sound and delivering long term business value. ethical business conduct To this end, the Board has reviewed is delivered. and maintained our Treating Customers Fairly and Vulnerable Whistleblowing Customers policy. Through We operate a conidential concerted focus, TCF has become whistleblowing hotline which is an integral part of the culture and The Consumer Duty available for all of our team and is subject to frequent and rigorous The Consumer Duty is a suite of our suppliers, to give them the scrutiny within all forums that new regulations introduced by the opportunity to raise any issues consider, inter alia, customer facing FCA that set a higher standard for about dishonesty or malpractice processes, employee remuneration, the treatment of consumers using within Motorpoint; the results of and product selection. We are inancial services and products. which are independently collated committed to delivering the best The duty requires irms to put their and submitted to the Risk and possible service to our customers, consumers’ interests irst, making it Compliance Committee. The Chief with objectives across the business easier for them to make decisions in People Oicer reports regularly relecting this aim. their best interests and receive to the Audit Committee on good outcomes. whistleblowing matters. In particular, the following business areas are under constant review The regulations go further than Anti bribery and corruption in light of changes to Motorpoint’s the TCF regulations and require all Our anti bribery policies and anti business model, customer regulated irms to be compliant money laundering policies were requirements or the regulatory by 31 July 2023 for open products refreshed during the year following environment: andservices. a review and were communicated • marketing practices, including to all employees. Motorpoint has promotional material; The duty sets an overarching a zero tolerance policy in respect • sales processes, whether on site, principle, cross cutting rules and of bribery and corruption. This via the contact centre or digital; requires implementation across four extends to all business dealings • customer communication; key outcomes. Below is an outline and transactions, and includes a of the duty and a description of how • record keeping; and prohibition on oering or receiving Motorpoint governs its ongoing • complaints handling. inappropriate gifts or making undue compliance with the duty. payments to inluence the outcome A review and reporting environment of business dealings. Motorpoint welcome the FCA’s new has been developed to ensure that regulations. Whilst the Group’s FCA Motorpoint’s high expectations are Employees are required to disclose governance processes already in met and that all systems, people and oers of gifts, hospitality or other place in respect of TCF are aligned processes are supported to achieve incentives with a value of more with much of the new legislation, our TCF objectives, including via: than £100. All employees receive a speciic working group was • qualitative quality controls, such communication of the relevant formed in the year to address the as after sale customer interviews policies as part of the onboarding new legislation and ensure that and mystery shoppers; process and new versions are sent Motorpoint’s systems, processes out if updated. • quantitative quality controls, such and controls are appropriately in line as cancellation rates for products with the new consumer duty. The Group does not make within their cooling o period; and political donations. • ongoing training and support for our team, including personalised and scheduled refresher training. 48 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Area Description Motorpoint Governance The Consumer This is the overarching principle that deines the purpose Motorpoint has appointed a speciic Principle of all the new Consumer Duty regulation, that “irms working group covering all aspects must act to deliver good outcomes for retail customers”. of the duty, led by the Customer Experience Director, with the work of the group reported to the Motorpoint PLC Board. The Cross 1. ‘Acting in good faith’ (e.g. not taking advantage of any The working group has worked Cutting Rules lack of knowledge on the consumer’s part). with the business areas already highlighted in the TCF section to 2. ‘Avoiding foreseeable harm’ (e.g. performing ensure that the governance and aordability checks prior to application). constant review are aligned with the cross cutting rules of the consumer 3. ‘Supporting consumers in achieving their inancial duty. This has included a process objectives’ (e.g. providing a straightforward method mapping exercise ensuring complete of cancelling a product should it be in the customer’s coverage of the legislation. interest to do so). The Four Product and services: As a part of Motorpoint’s Outcomes The actions required for this outcome will dier depending implementation plan for the on irm status as a manufacturer, co-manufacturer, or consumer duty, a full review of distributor. Overall, it requires irms to work to ensure the customer journey has taken the products and services they oer are right for the end place in the year to ensure all four consumer and consider any vulnerabilities their target outcomes are appropriately in line market may have that can be accounted for. with the legislation. Price and value: The working group has worked Firms should focus on the fair pricing of their products with the business to ensure that and oering value for money. Firms should review the customer journey remains commission arrangements and for example, ensure they under constant review and has a do not encourage the sale of products that are not in the governance structure in place that consumer’s interest. ensures continued compliance with the legislation. Consumer understanding: The FCA feels the consumer is often placed at a Motorpoint has worked closely with disadvantage due to a lack of knowledge about the its product suppliers (‘lenders’) products or services a irm is selling, while the irm has for regulated consumer products the greater understanding. This outcome serves to make and ensured that the indings from irms address this imbalance to allow consumers to make the lenders in respective of the informed decision. This could take the form of providing consumer duty were included within further information in an easily digestible and accessible our customer journey governance. way when it is most relevant to the consumer. Consumer support: This outcome includes the numerous ways in which irms act to communicate with consumers and provide their services. There should be straightforward processes. The key message from the FCA here being that it should not be any more diicult to cancel, switch or complain about a product than it is to purchase it initially. Human rights Motorpoint conducts business in an ethical manner and adheres to policies which support recognised human rights principles. We continue to address the risks of modern slavery and human traicking, with the Board debating and adopting the annual Anti Slavery Statement and raising awareness of the risks across the business. We work with our suppliers to protect workers from abuse or exploitation by communicating to them the terms of our Anti Slavery Statement and request their adherence to our policy. A statement of the Group’s compliance with the Modern Slavery Act 2015 can be found on the Group’s website at | www.motorpointplc.com 49Motorpoint Group PLC | Annual Report and Accounts 2023 ## TASK FORCE ON CLIMATE RELATED ## FINANCIAL DISCLOSURES ‘TCFD’ We support the Task Force on Climate related Financial Disclosures (‘TCFD’) and its recommendations and are making TCFD disclosures consistent with TCFD’s recommendations and recommended disclosures, in line with our prior year commitment and in consideration of the all sector guidance. We recognise that climate change is the most serious challenge to the global community, and we understand we have a role to play in reducing greenhouse gas emissions and striving for change in the industry. The eects of a transitioning economy will directly aect the motor industry throughout the value chain, evidenced by the UK Government’s commitment to the end of the sale of conventional new petrol and diesel cars by 2030. We are committed to continuously measuring and assessing the impacts of climate risks and opportunities across our operations, physical stores and supply chains. Our pathway to full disclosure is as follows: Progress in We have successfully completed our scenario planning FY23 exercise, modelling three scenarios using the IEA World Energy Outlook 2022, as well as a range of inputs and bespoke considerations for the speciic risks that Motorpoint faces. We have also successfully materially assessed and disclosed the relevant Scope 3 emissions for Motorpoint. Roadmap for Our strategy on how to achieve a complete transition to a the future lower carbon operating model is still reaching maturity. We are exploring initiatives such as an ESG reporting framework, accreditation and fully aligned and integrated Science Based Targets, as well as the potential for a formal carbon reduction plan. 50 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Governance Board of Directors • Increased focus on climate related matters • Review and approve climate related risks and principal risks • Quarterly reviews of climate related risks • Chris Morgan, CFO, climate related risk register owner | Audit Committee | | Executive Risk | | Environment, Social | | | --- | --- | --- | --- | --- | --- | | • Provides twice yearly | | and Compliance | | and Governance | | | | overviews of the risks | Committee | | (‘ESG’) Committee | | | | facing the organisation, | • Delegated responsibility | | • Established an ESG | | | | including climate change | | for identiication, | | committee to be | | | risk on the agenda | | management and | | responsible for | | • Reviewed Board paper in | | | assessment of the | | assessing the Group’s | | | January 2023 containing | | Group’s risks | | environmental | | | climate related risks | • Quarterly reviews of the | | | sustainability strategy | | | and opportunities, and | | Group Risk Register | | | planned TCFD disclosures • Quarterly reviews of the Group’s emerging risks • Review and management of climate related risks • Twice yearly review of the Group’s principal risks a) Describe the Board’s The Group Risk and Compliance Our Head of Sustainability is oversight of climate related Committee has a responsibility to responsible for implementing monitor and oversee emerging risks the Group’s strategy in respect of risks and opportunities. and as such our climate risk register water and waste management – The Board of Directors is ultimately was reviewed at least quarterly by key elements in our ambition to responsible for the oversight of our the Board and key management be a more sustainable business. In climate related risks and opportunities personnel in the year. addition, our Head of Sustainability impacting the Group. The Board’s is responsible for the measurement oversight is supported by three As well as the Board, the Audit and reporting of our GHG emissions, committees who have delegated Committee provides twice yearly which are disclosed in line with responsibility over various aspects of overviews of the risks facing the SECR in the environment section of governing the Group’s climate related organisation, including climate the annual report, pages 36 to 39. risks and opportunities. change risk on the agenda. We have expanded our tracking of emissions in the year to include a full Climate related risks, including the b) Describe management’s breakdown of our Scope 3 emissions. risks of a transitioning economy as role in assessing and These can all be found on page 39. well as physical risks to Motorpoint managing climate related sites and stores are integrated Our inance function is responsible as a part of our risk management risksand opportunities. for supporting the business in framework. A dedicated climate Management’s role is to ensure understanding the inancial impact related risk register is maintained that the day to day management of the Group’s climate related which is monitored and assessed at of climate related risks and risks and opportunities and has regular intervals. opportunities are delivered along with undertaken a high level inancial delivering the strategy with respect analysis this year to help understand The Board has oversight of to osetting our carbon output, in the potential eects on the Group’s climate risks and opportunities line with our roadmap to becoming a assets and costs. through escalation via the Risk and more sustainable business. Compliance Committee as noted in the diagram above. 51Motorpoint Group PLC | Annual Report and Accounts 2023 ## TASK FORCE ON CLIMATE RELATED ## FINANCIAL DISCLOSURES ‘TCFD’ CONTINUED | All of the Group’s functions are | possibility of a risk event crystalising | Group’s risk management processes, | | --- | --- | --- | | responsible for implementing risk | over any of the next three years. | we have assessed our risks and | | management practices as deined | Medium term analysis is deined as | mapped them to our principal risks. | | in the risk management framework, | an outward looking ive years beyond | The summarised climate related | | including in relation to climate | the short term risk window. Long term | risk register can be found on pages | | related risks and opportunities. | analysis is deined as anything beyond | 56 and 57. We have kept our short, | | | the medium term window. During | medium and long term deinitions | | Strategy | the year, the CFO continued as the | consistent with the prior year, with | | | risk owner for our climate risks and | short term risks being those that | Our climate change strategy is opportunities. would crystalise within the next three underpinned by our desire to oset years and medium risks being the ive the carbon we produce and to be a a) Describe the climate related year window beyond short term risks. responsible, sustainable organisation risks and opportunities the As such, our long term risks are those whilst also ensuring climate related designated as eight years or more in risks are within appetite and organisation has identiied the future. opportunities are appropriately over the short, medium and identiied and maximised. We consider long term. Our opportunities are disclosed the short term horizon in line with our Following the integration of climate below along with the applicable risk management framework to be the risk and opportunity this year into the time frames: Area: Opportunity: Time Frame Competition • Increased opportunity to take market share by being a leader on Choice, Value, Medium and Market Quality and Service across zero emission vehicles. Supply Chain • Opportunity to maximise on an eicient, sustainable supply chain. Medium Technology • Opportunity to take advantage of new technology helping the business achieve Medium net zero across its Scope 1 & 2 emissions more quickly. Brand and • Opportunity to have a reputation for being a responsible, sustainable company Medium Reputation which will be increasingly important for consumers. Physical • We expect an increased opportunity to be able to have a more sustainable Long Locations footprint with new ways of running a store with sustainable energy generation, more eicient stores and an opportunity to consider nature reclamation and air pollution ideas in the stores of the future. | The responsibility for maximising | planning looking at future cash | We considered in our scenario | | --- | --- | --- | | opportunities ultimately lies with the | lows across three IEA Global | analysis the risk of increased taxation | | Board, with delegated responsibility | Energy Outlook Scenarios to ensure | and legal requirements should the | | to the ESG Committee for reporting | that our climate related risks had | Group fail to achieve its net zero | | on possible opportunities in | been considered for any increased | ambitions as well as the physical | | theseareas. | costs when considering the value | risks of climate change to our | | | of our assets and future forecasts. | physical store locations, based on an | | All of the risks identiied are within | The indings from this work | estimation of our future footprint. | | the scope of the Group’s emergent | were that when including these | | | risk process and none of the risks | additional costs in future cash lows | We note that our carbon footprint, | | identiied were assessed as being | in respect of climate related risks | when taking into account Scope | | material in the short term. This | across what the Board believe to be | 3 emissions, is disproportionately | | will be carefully monitored in line | plausible outcomes, there was not | outweighed by the use of our sold | | with the Group’s risk management | a signiicant risk of impairment to | products category, relating to the | | processes and will be enhanced by | our future operating model assets | emissions of internal combustion | | the Group’s plans around scenario | or any short term risk identiied | engine vehicles. As a used car | | planning in the future. | indicating a possible impairment | retailer, we need all manufacturers | | | over currentassets. | to improve their proposition on | | b) Describe the impact | | zero emission vehicles, so that we | | of climate related risks | With respect to judgements made | in turn can oer our customers the | | | over the future business and | same Choice, Value, Service and | and opportunities on the strategy, the Group anticipates a Quality without compromising on organisation’s business, natural shift in consumer choice product or convenience, noting that strategy and inancial planning. towards alternately fuelled and many customers still have concerns During the year we undertook an Electric Vehicles (‘EVs’) in the contemplating the switch to zero exercise as a part of our inancial medium term. emission vehicles. 52 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements The Group has undertaken activity in the year to execute the prior year planning work on transition mitigations: Prior Year Plan Current Year Execution • Planning in place for increased electric charging • Our new Coventry and Ipswich stores have EV points for customer convenience at our stores. charging points installed for both customer use and in preparation. Rollout of charges at existing stores is underway. • Technicians trained and ready to prepare EVs. • All technicians including new team members in this role are trained to safely prepare EVs. Other impacts in respect of business and strategy can be seen on pages 56 and 57 in our climate risk and opportunities register which includes any current plans for risk mitigations across our business and strategy. c) Describe the resilience of the organisation’s strategy, taking into consideration dierent climate related scenarios including 2° or lower scenario Net Zero Emissions by 2050 scenario (NZE) Announced Pledges Scenario (APS) Stated Policies Scenario (STEPS) | A scenario which sets out a pathway for the global | | A scenario which assumes | A more conservative scenario | | --- | --- | --- | --- | | energy sector to achieve net zero CO | 2 emissions | that all climate commitments | benchmark for the future, | | by 2050. | | made by governments around | removing the assumption that | | | | the world, including nationally | governments will reach all | Our work on this low carbon transition scenario determined contributions and announced goals. This scenario focuses on the rapid policy, regulatory, longer term net zero targets takes account of existing policies technological and market changes that will be are met. and measures as well as those required by 2030 to restrict emissions to a level under development, ultimately which limits global warming to 1.5°C. This scenario aims to show leading to a world with increasing the ambition gap, highlighting physical climate change impacts how close announced pledges owing to warming increases get to the Paris 2015 target beyond 2.0°C. of limiting the increase in warming to 1.5°C. Deinitions and Objectives In this climate model, the warming impact is estimated to be in the bracket of IPCC assessed scenarios that limit warming to 2.0°C. We used our target operating model for 2030, which assumes we achieve our medium term growth goals and spread our footprint to 30 stores, in conjunction with the IEA assumptions and inputs in the ’IEA (2022), Global Energy and Climate Model’. This includes detailed input assumptions over GDP, population and technology changes as well as the speciic elements relevant to Motorpoint under each scenario, including cost of energy and cost of carbon. The eects of each scenario are shown below. Methods The IPCC Sixth Assessment Report on Mitigation of Climate Change, released in April 2022, assessed a large number of scenarios that led to at least a 50% chance of limiting the temperature rise to 1.5°C in 2100. The NZE Scenario trajectory is well within the envelope of these scenarios.’ IEA (2022), Global Energy and Climate Model, IEA, Paris https://www.iea.org/ reports/global-energy-and-climate-model, License: CC BY 4.0. 53Motorpoint Group PLC | Annual Report and Accounts 2023 ## TASK FORCE ON CLIMATE RELATED ## FINANCIAL DISCLOSURES ‘TCFD’ CONTINUED Net Zero Emissions by 2050 scenario (NZE) Announced Pledges Scenario (APS) Stated Policies Scenario (STEPS) | Assessing the inputs and outcomes of the NZE | Assessing the inputs and | Under the STEPS pathway, | | --- | --- | --- | | pathway, Motorpoint would see increasing risks of | outcomes of the APS pathway, | Motorpoint would see reduced | | transition in the medium term, especially if the cost | Motorpoint would see increased | risks of transition in the medium | | of carbon as modelled in the scenario cannot be | risks of transition in the medium | term, with osetting costs likely | | mitigated through osetting using voluntary carbon | term from potentially increased | to be much lower from avoidance | | markets (‘VCMs’) or achieving natural net zero | costs of carbon osetting, albeit | of the modelled increases to the | | across Scope 1, 2 and 3 emissions. | much less signiicant than under | cost of carbon in the NZE and APS | | | the NZE pathway. | pathways. However, there would be | In the medium term outlook for this scenario, we greater physical risks to stores and took the approach of assuming Motorpoint would In the medium term outlook supply chain. | still be selling a small proportion ICE vehicles in 2030 | for this scenario, we took the | | | --- | --- | --- | | and would not totally achieve zero emission vehicles | approach that Motorpoint’s | Our modelling in this scenario | | sales until at least 2034. We also assumed that we | current strategy for EV transition | still assumes that Motorpoint | | would be mandated to oset any residual carbon | would be achieved, with a | would continue on its path to be | | still produced. We modelled osetting at least as | signiicant proportion of our sold | a sustainable business, osetting | | many tonnes of carbon as we did in 2021, as well as | products being zero emission | its carbon emissions and helping | | our Scope 3 emissions for the limited ICE vehicles | vehicles by 2031. | customers reduce their impact on | | sales still expected to be made, and factoring in the | | the planet by in turn, reducing our | Under this scenario, Motorpoint increased cost of carbon. We also factored in an own emissions. would be on track for the increased cost of electricity, in line with the modelled announced pledges and as We would expect greater physical price increases in the IEA ‘NZE’ scenario. such, we assumed lower costs risks to Motorpoint’s stores in the As such, Motorpoint could expect greater carbon of osetting (compared to ‘NZE’) long term both acute and chronic osetting costs and energy costs which would would be required, factoring in an under this pathway. increase operating expenditure. However, even in increase for the potential size of Possible mitigations may include | | this scenario, the model showed that the business | Motorpoint’s footprint based on | | | --- | --- | --- | --- | | Eect on Motorpoint | | | strategic placement of future stores | | | would be resilient enough to cope with increased | the 2030 operating model. | | to factor in weather defences as costs of transition. | | An acute risk of physical damage | well as continued detailed business | | --- | --- | --- | | In the long term under this pathway, we would | to sites would be greater than | continuity planning work. | | expect the business to achieve signiicantly reduced | the NZE pathway albeit reduced | | | Scope 3 emissions from greater (or total) proportion | in the long term compared to the | | | of sold products being zero emission vehicles which | STEPS scenario. We expect to | | | would ultimately mitigate the greatest portion of | mitigate this risk through physical | | | carbon required to be oset. | defences and strategic planning | | over the location of our future Even in the NZE scenario an acute risk of physical stores. damage to stores remains with eects of warming limited, not mitigated. We expect to mitigate this risk through physical defences and strategic planning over the location of our future stores. Our current store footprint is substantially low rated for lood risk. We expect that the chronic risk of sea level rises as a result of warming impacts to be reduced under this scenario. Medium term impact: | | | | Impact of climate risks on | ‘NZE’ business area | | --- | --- | --- | --- | --- | | Business area ‘NZE’ scenario risk STEPS pathway risk | | | our inancial performance | mitigations | | Use of sold products Carbon tax on Scope | | Physical damage | A inancial impact | Infrastructure work | | | 3 emissions | to inventory from | may manifest itself | across stores and | | | | increased extreme | in an increased cost | preparation centres | | | | weather events | of compliance if | to ready for increased | | | | | Motorpoint cannot | zero emission | | | | | reduce its emissions | vehicles | in line with the pace UK stores and Carbon tax on Scope Flood risk Continued ESG of regulatory change preparation centres 1 and 2 emissions strategy work to reduce Scope 1 & 2 emissions 54 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Risk management by the ESG Committee, chaired by steps are taken to agree mitigating Adele Cooper. The ESG Committee actions to bring the risk exposure to During the year, the Board has meets quarterly and ensures within appetite. discussed climate change related Motorpoint progresses on its journey matters and identiied both risks of carbon osetting and analysing our Our risk management framework and opportunities for the eects of environmental impact. states that risks are managed on a transitioning economy as well as an integrated basis throughout physical risks of climate change. Climate related risks, including our organisation and as such, These have been through a process risks of a transitioning economy as function level risk registers were of review from both the Group Risk well as physical risks to Motorpoint updated during the year to ensure and Compliance Committee and the stores and preparation centres are consideration of new and emerging AuditCommittee. integrated as a part of our emergent risks, including climate related risks, risk process, which is a part of our where appropriate. The ongoing management of risk management framework. The Motorpoint’s climate risks is risks on this register were all assessed Metrics and targets performed through the quarterly to be ‘emerging’ and as such are review of the Group’s risk in the Risk The Group has metrics and targets monitored closely for the requirement and Compliance Committee. This that facilitate the measurement of the to enter active mitigation strategies. is informed by the work of the ESG Group’s impact on the environment The process for managing individual Committee, who also meet quarterly. and monitor performance against the risks is to carefully monitor the impact Our climate risks and opportunities Group’s ambition with respect to the assessment of these risks, with are mapped to our principal risks carbon oset of operations. mitigating activities actioned should and uncertainties, consistent with any risk be deemed signiicant and our approach to fully integrate a) Disclose the metrics used outside of Group risk appetite. climate change risk into our risk by the organisation to assess management practices. climate related risks and All of the climate related risks opportunities in line with identiied in the register of emerging a) Describe the organisation’s climate risks are related to the Group’s its strategy and risk process for identifying and principal risks, which have their management process. assessing climate related risks. own wider controls and mitigating The Group’s strategy is underpinned The process for identifying and activities. As such, the climate related by a desire to achieve carbon assessing climate related risks risks include mapping to the relevant neutrality, and as such KPIs are is aligned with the Group Risk principal risk. Details on mitigating monitored closely, helping inform Management Framework. activities for the Group’s principal the Group over its climate related risks is held within the principal risks risks. The metrics that the Group Climate related risks are within the and uncertainties (‘PRUs’) database. monitors are within the scope of scope of the Group’s emergent risk the ESG Committee which provides process which feeds from function c) Describe how processes oversight and governance. The day level risk management as well as the for identifying, assessing, to day management of the Group’s Group Strategy. Where an emergent and managing climate related metrics and targets are within the climate related risk is deemed to be scope of the role of our Head of risks are integrated into material to Group strategy it will be Sustainability who is responsible the organisation’s overall included in the Group Risk Register. for the implementation of our risk management. Group risks are subject to Group Risk ambitions in becoming a more and Compliance Committee, Senior Risk measurement and assessment sustainable business. Our KPIs have Leadership Team (‘SLT’) and Board is deined in the risk management been updated in the year to more level review. The structure of our risk framework and all of our climate accurately track our emissions and management at Motorpoint can be related risks were assessed in line impact on the environment, which is found in our risk management section with the deined criteria for assessing governed by the ESG Committee. of the annual report. emerging risks to the business in the risk management plan. The KPIs are: b) Describe the organisation’s • KPI 1: GHG emissions (CO 2 Ongoing management of risks is processes for managing Scope 1 and 2) as disclosed performed in line with our risks climate related risks. in the SECR statement in the management framework. Where environment section. During the year climate risks and assessed to be above minimum opportunities were managed using • KPI 2: Intensity Ratio as disclosed risk recognition limits for a low a dual approach. in the SECR statement in the rated risk (greater than 0% chance environment section. of crystallisation in the next three Our journey towards being a more years and 2% or greater impact sustainable company, including In addition, the KPIs are used by on key inancial targets speciic to our strategic goals of osetting the Group Finance to aid its inancial that risk) and outside of appetite, carbon that we produce, is managed review of climate related risks. 55Motorpoint Group PLC | Annual Report and Accounts 2023 ## TASK FORCE ON CLIMATE RELATED ## FINANCIAL DISCLOSURES ‘TCFD’ CONTINUED b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks Our Scope 1, 2 and appropriate Scope 3 emissions are disclosed in our environment section on pages 36 to 39. c) Describe the targets used by the organisation to manage climate related risks and opportunities and performance against targets The principal target for the organisation is in line with the strategy to reach net zero through carbon neutrality, for its Scope 1 and 2 emissions, and currently recognising that carbon osetting has a role to play when considering the whole supply chain (Scope 3 emissions). As such, the KPIs disclosed above are measured carefully to ensure that in the future, the Group’s targets are met across Scope 1, 2 and 3 emissions. Dynamic risk scoring | Net zero by | Announced | Stated | | --- | --- | --- | | 2050 (1.5) | policies | policies | | | 2.0-2.5 | (>2.5) | Risk classiication Risk area Mapping to PRUs Timeframe Risk description NZE APS STEPS Transition Policy and Legal Regulatory and Compliance Long Term Risk of increased taxation as UK Government aims to meet its own climate ##    change commitments. Key areas relating to Motorpoint include: increased taxes for energy, vehicle fuel taxes, waste and overall 'carbon tax' Policy changes deter need for private vehicle ownership ##    Technology & Competition, Market and Customers Long Term Increased costs from carbon osetting or needing to enter VCMs to ##    Market Risks support journey to net zero Medium Term Not meeting increased demand for electric and alternate fuelled vehicles ##    leading to loss of market share Availability and Terms of Customer Finance Customer inance availability is limited because alternative fuel cars are ##    more expensive than traditional petrol / diesel cars in relation to earnings and lenders are not conident over battery degradation Reputational Brand and Reputation Medium Term Customers lose conidence in the brand as Motorpoint does not respond ##    Risks eectively or urgently to public concerns over climate change People and Culture Failure to attract and retain talent, if Motorpoint is not perceived to ##    be a responsible company Competition, Market and Customers Failure to attract and retain investors / pressure from investors / ##    shareholders if Motorpoint is not perceived to be a responsible company Physical Acute Risks Supply Chain Disruption Medium Term Risk of action from climate action groups disrupting the business ##    Risks Long Term Extreme weather events could lead to site and inventory damage ##    Extreme weather events could cause signiicant supply chain disruption ##    aecting Motorpoint's ability to move cars quickly and eiciently Extreme weather events could increase competition for land use, ##    aecting Motorpoint's ability to expand to new sites Chronic Risk Supply Chain Disruption Long Term Material rise in sea levels leading to changed UK landscape: site ##    relocation / supply chain alterations required 56 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Key to risk scoring ##  High ##   Medium ##   Low Dynamic risk scoring | Net zero by | Announced | Stated | | --- | --- | --- | | 2050 (1.5) | policies | policies | | | 2.0-2.5 | (>2.5) | Risk classiication Risk area Mapping to PRUs Timeframe Risk description NZE APS STEPS Transition Policy and Legal Regulatory and Compliance Long Term Risk of increased taxation as UK Government aims to meet its own climate ##    change commitments. Key areas relating to Motorpoint include: increased taxes for energy, vehicle fuel taxes, waste and overall 'carbon tax' Policy changes deter need for private vehicle ownership ##    Technology & Competition, Market and Customers Long Term Increased costs from carbon osetting or needing to enter VCMs to ##    Market Risks support journey to net zero Medium Term Not meeting increased demand for electric and alternate fuelled vehicles ##    leading to loss of market share Availability and Terms of Customer Finance Customer inance availability is limited because alternative fuel cars are ##    more expensive than traditional petrol / diesel cars in relation to earnings and lenders are not conident over battery degradation Reputational Brand and Reputation Medium Term Customers lose conidence in the brand as Motorpoint does not respond ##    Risks eectively or urgently to public concerns over climate change People and Culture Failure to attract and retain talent, if Motorpoint is not perceived to ##    be a responsible company Competition, Market and Customers Failure to attract and retain investors / pressure from investors / ##    shareholders if Motorpoint is not perceived to be a responsible company Physical Acute Risks Supply Chain Disruption Medium Term Risk of action from climate action groups disrupting the business ##    Risks Long Term Extreme weather events could lead to site and inventory damage ##    Extreme weather events could cause signiicant supply chain disruption ##    aecting Motorpoint's ability to move cars quickly and eiciently Extreme weather events could increase competition for land use, ##    aecting Motorpoint's ability to expand to new sites Chronic Risk Supply Chain Disruption Long Term Material rise in sea levels leading to changed UK landscape: site ##    relocation / supply chain alterations required 57Motorpoint Group PLC | Annual Report and Accounts 2023 ## FINANCIAL REVIEW ## Record ## revenues in ## achallenging ## market Economic headwinds provided a challenge to proitability, but record revenues and progress against strategic objectives put us in a position for sustainable proitable growth. | Group inancial | Gross proit was £85.7m (FY22: | (Loss) / Proit before taxation was | | --- | --- | --- | | performanceheadlines | £106.3m). FY22 beneitted from the | £(0.3)m (FY22: £21.5m), relecting | | | record used car inlation. In FY23 we | the fall from record margins in FY22, | Despite the fall in proitability, invested in the customer to ensure a lower number of units sold due to the Group experienced record we maintained our price leading a smaller market, increased strategic revenue, which increased by 8.9% position, in terms of low vehicle investment, losses from new store to £1,440.2m (FY22: £1,322.3m), prices and taking a lower inance openings and higher interest costs. with further strong market share commission to oset APR increases. gains. This growth was supported The latter part of FY23 was also Despite the lower proitability net by new stores, an increase in more impacted by retail price reductions cash improved signiicantly. Net expensive premium models being to clear through the well publicised cash, excluding lease liabilities, at 31 sold, and vehicle price inlation. fall in Electric Vehicle values. March 2023 was positive £5.6m (as set out on page 160) (31 March 2022: net £21.2m negative, being £7.8m cash and £29.0m fully drawn down revolving credit facility). ### “ We are pleased to report record revenues ### and strong market share gains, whilst ### recognising the impact on proitability ### due to the challenging economic ### environment in the past year.” Chris Morgan Chief Financial Oicer 58 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Trading performance ## £1,440.2m £(0.3)m The Group has two key revenue Total revenues (Loss) / Proit before tax streams, being (i) vehicles sold to retail customers via the Group's (FY22: £1,322.3m) (FY22: £21.5m) stores, call centre and digital channels, and (ii) vehicles sold to wholesale customers via the Group's Auction4Cars.com website. Retail customers Wholesale customers Total FY23 FY22 FY23 FY22 FY23 FY22 £m £m £m £m £m £m Revenue 1,175.7 1,112.3 264.5 210.0 1,440.2 1,322.3 Gross proit 74.5 91.0 11.2 15.3 85.7 106.3 Retail | Revenue from retail customers | Gross proit per retail unit for the | Our 18th (Edinburgh) and 19th | | --- | --- | --- | | was up 5.7% to £1,175.7m (FY22: | inancial year was £1,300 (FY22: | (Coventry) stores opened in the | | £1,112.3m), with 57.3k vehicles | £1,446). This reduction relected | autumn, and both are trading well. | | sold (FY22: 62.9k). The number of | investment in price leadership, | Ipswich opened in mid-May. | | vehicles sold is a consequence | both in terms of vehicle pricing and | | | of the fall in size of our available | lower inance commissions, and the | Wholesale | | market, as our share of this 0–4 | marking down of Electric Vehicles. | | Wholesale units sold via year old market increased to Auction4Cars.com, which sells 3.5% (FY22: 3.1%). Of the sales, Finance penetration increased to vehicles that have been part 37.5% were sold online / digitally. 56% (FY22: 52%). Our APR inance exchanged by retail customers, or Since re-opening post Covid, the rates continue to be competitive directly purchased from consumers, majority of customers still prefer despite an increase in October from was down against last year relecting the store experience for their 8.9% to 9.9%, and in January to the fall in retail units. 32.4k vehicles vehiclepurchase. 10.9% which relected the increase were sold via this purely online in cost of inance. In FY23 we did platform (FY22: 34.8k). Gross proit We purchased 5,016 vehicles not pass all of the cost of money per wholesale unit was £346 (FY22: directly from consumers and of increases to customers which £440). Last year beneitted from the these 3,387 were sold through demonstrated our price leadership strong market conditions, and this the retail channel. but delated gross margin. year marks a return to more normal levels (FY21:£344). 59Motorpoint Group PLC | Annual Report and Accounts 2023 ## FINANCIAL REVIEW CONTINUED | Operating expenses | Taxation | Balance sheet | | --- | --- | --- | | Operating expenses decreased from | The tax charge in the period is | Net assets remained broadly | | £81.3m in FY22 to £79.2m. This fall is | for the amount assessable for UK | consistent with prior year at £38.9m. | | despite a planned uplift in strategic | corporation tax in the year net of | Working capital was proactively | | costs with further investments in | prior year adjustments and deferred | managed, with a signiicant | | digital, technology and new stores. | tax credits. The tax charge has | improvement in the net | | These incremental costs amounted | reduced to £0.3m (FY22: £4.6m), | cash position. | | to £6.1m (FY22: £1.0m). Despite new | relecting lower proitability. | | | stores and growth of the digital | | Non-current assets were £75.2m | | marketing team, overall headcount | Shares | (31 March 2022: £59.2m) and made | | reduced 14.4% to 794, as we focus on | | up of £13.1m of property, plant | At 31 March 2023, 90,189,885 eiciency in stores, preparation and and equipment, £58.4m right-of- ordinary shares were outstanding, head oice. Energy usage per square use assets and intangible assets of which 1,686,307 were held in the foot fell 7.3% compared to last year. of £3.7m (31 March 2022: £10.9m, Employee Beneit Trust. Overall property costs increased £46.7m, £0.6m and a deferred tax due to new locations and business asset of £1.0m respectively). The Earnings per share rates (Government relief available Group currently owns one remaining Basic and diluted earnings per in previous year). Marketing costs freehold plot of land in Glasgow. share were both (0.7) pence decreased from £18.9m to £14.0m. All other properties are on leases of (FY22:18.7pence). The early part of FY22 included various lengths. increased marketing costs to support stores postlockdown. Dividends The Group closed the period with £148.6m of inventory, down from No dividend was paid in the period Other income £228.4m at 31 March 2022. Days in (FY22: £Nil) and the Board has not stock for the period improved to 51 Other income relates to the small recommended a dividend (FY22: days (FY22: 54 days). Although the gain on the sale and leaseback £Nil) while it focuses on investment record price inlation experienced transactions during FY23 (no such to drive organic growth. in FY22 was not repeated, used transactions in FY22). vehicle prices generally remained Capital expenditure high compared to historic levels. Exceptional items and disposals However, we did experience a There have been no exceptional Cash purchases of property, plant signiicant fall in Electric Vehicle items in the period (FY22: £Nil). and equipment, and intangible prices in the second half of FY23, assets was £9.4m (FY22: £6.9m), and which negatively impacted margin. Interest primarily related to bringing the new | The Group’s net inancial expense | stores in Edinburgh and Coventry | At 31 March 2023, the Group had | | --- | --- | --- | | was £7.1m (FY22: £3.5m); the | up to standard for opening, major | £195.0m (31 March 2022: £195.0m) | | increase relected the sharp | reits at Newport and Burnley stores, | of stocking inance facilities | | rise in cost of borrowing, which | and intangibles relating to software | available of which £102.5m (31 | | materially impacted the funding | and website development. All new | March 2022: £147.0m) was drawn. | | ofstockfacilities. | properties were leased. | The Group has available stocking | facilities with Black Horse Limited of | Total interest charges on the | In the year, two sale and leaseback | £120.0m, and £75.0m with Lombard | | --- | --- | --- | | stocking facilities were £4.7m | transactions were successfully | North Central PLC. | | (FY22:£1.5m). | completed. These were the | | | | Stockton-on-Tees store and the | The Group also has a £35.0m facility | | Interest on lease liabilities of 2.0m | Peterborough preparation centre. | with Santander UK PLC, split between | | (FY22: £1.7m) was incurred in | The freeholds were sold gross for | £6.0m available as an uncommitted | | theyear. | £5.0m and £4.8m and leased backed | overdraft and £29.0m available as a | | | at annual rents of £350k and £265k | revolving credit facility. This facility | | Interest on banking facilities was | respectively. | was extended in June 2023 for a | | £0.4m (FY22: £0.3m). | | further three years, with the option of | two one-year extensions. At 31 March 2023, £Nil (31 March 2022: £29.0m) was drawn on this facility. 60 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Trade and other receivables were Capital structure and treasury £18.4m (31 March 2022: £13.6m). The Group's objective when This increase related to timing managing working capital is to of commissions due from ensure adequate working capital for Finance providers. all operating activities and liquidity, including comfortable headroom to Trade and other payables, inclusive take advantage of opportunities, or of the stock inancing facilities, have to weather short term downturns. decreased to £143.8m (31 March The Group also aims to operate an 2022: £193.8m) primarily relecting eicient capital structure to achieve a reduction in the drawn down its business plan. stocking facilities. The Group's long term funding The increase in total lease liabilities arrangements consist primarily of to £63.6m (31 March 2022: the stocking inance facilities with £52.8m) relects the new store Black Horse Limited and Lombard additions, along with the sale and North Central (to a maximum of leasebacks of Stockton-on-Tees and £195.0m) and an unsecured loan Peterborough preparation centre. facility provided by Santander UK Ipswich opened in May 2023. PLC, split between £6.0m available as an uncommitted overdraft and | Cash low | £29.0m available as a revolving | | --- | --- | | Cash generated from operations was | credit facility. This loan facility | | £41.3m inlow (FY22: £5.5m outlow). | with Santander UK PLC has been | | This relected the large reduction in | extended in June 2023 and will | | the value of inventory which more | now expire in June 2026, with the | | than oset the drop in creditors and | option of two one-year extensions, if | | lower operating proit. | agreed by both parties. | Other main items in the cash low | include: capital expenditure of | Chris Morgan | | --- | --- | | £9.4m (FY22: £6.9m), payments | Chief Financial Oicer | | to satisfy future employee share | 14 June 2023 | plan obligations of £0.7m (FY22: £5.0m), a net repayment of borrowings (RCF) of £29.0m (FY22: £Nil), principal lease repayments of £5.9m (FY22: £4.0m), interest payments of £7.1m (FY22: £3.5m) and tax payments of £1.1m (FY22: £2.3m). Net proceeds of £9.7m were received for the two sale and leasebacks. 61Motorpoint Group PLC | Annual Report and Accounts 2023 ## RISK MANAGEMENT ## Risk management: a key component of governance at ## Motorpoint, continuing to build on the strong foundation ## of our shared values ### Risk management is a key component of Motorpoint’s strategy. We recognise that ### eective risk management is essential to protecting our assets, maintaining our ### reputation, and ensuring the long term success of the Group. During the year we ### continued on our journey to level up risk management across the Group, including ### through a new training programme for all team members as well as focus and ### oversight from the Group Risk and Compliance Committee. We are committed to ### maintaining a strong and eective risk management framework underpinned by ### our core values: Happy, Honest, Supportive and Proud. Approach to risk management risk management strategy is a key and assessing the Group’s risks priority for the Group, with last year’s annually, measuring them against The Board is accountable for expansion of the Group Risk and a deined set of criteria, and maintaining a policy of continuous Compliance Committee being irmly considering the likelihood of identiication and review of the embedded in the year as a robust risk occurrence and potential impact principal risks facing the Group which management practice. to the Group. The Group Risk and could threaten its future performance Compliance Committee is formed or business model. On behalf of the The Group Risk and Compliance of the Executive Board, the Head Board, the Audit Committee reviews Committee has delegated of Internal Audit and Risk and risk the eectiveness of Motorpoint’s risk responsibility, from the Audit owning Senior Leadership management processes. Motorpoint’s Committee, for formally identifying Team (‘SLT’) members. Risk management Plc Board • Risk appetite set by the Board Group • Overall responsibility for risk strategy and management objectives Audit Group Risk and Committee Compliance Reviews Committee Emerging Principal risk Climate risk eectiveness of • Delegated responsibility risks review review risk management for risk management Functional management • Day to day risk management Finance IT Operations People • Clear escalation routes in place 62 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements • Horizon scanning – including Risk management plays an integral The Group’s risk proile is reported the review of construction part in the Group’s planning, to the Executive Board for review and distribution media and decision making and management and challenge, ahead of inal review attendance at industry forums by processes. All team members have and approval by the Board. These management, including members a responsibility to ensure they principal risks are then subject to of the Group Risk and Compliance understand the risks in their area Board discussion during the course Committee. Findings and key of activity and that they implement of the year, as appropriate. To drive messages are discussed as part of and operate eective controls to continuous improvement across the agenda of the Group Risk and manage the risks. the business, the Group Risk and Compliance Committee. Compliance Committee monitors the • External insights – using The Group’s risk management suitability and adequacy of controls specialist third parties to identify approach is summarised as follows: in place and the ongoing status new and changing risks such as of action plans against key risks upcoming changes to regulation. | 1. Identify potential risks | | quarterly, with a particular focus for | | | | --- | --- | --- | --- | --- | | | through scanning the external | those risks considered to be outside | • Management meetings – regular | | | | environment, as well as internal | of the Group’s risk appetite. | | Head of Internal Audit and | | | processes and the Group | | | Risk attendance at operational | | | strategy. | | | management meetings to discuss | Emerging risks 2. Assess and assign a value to the potential new risks. This is further Embracing the indings from the supported through monthly risk to allow it to be prioritised. FRC’s thematic review has been a key business performance reviews Assessing likelihood for gross part of Motorpoint’s approach to risk conducted by the CEO and (before controls) and net (after management in the year, including CFO to identify risks potentially the eect of controls). the request for more detailed materialising in business 3. Respond through planning information about the process for performance. future actions based on the identifying and assessing emerging current risk assessment and the risks. The Motorpoint Group Risk and Assessment and reporting target risk level (which will be Compliance Committee assumes Once identiied, emerging risks are in line with risk appetite). Risks responsibility for the identiication assessed as follows: can be transferred, terminated, and assessment of Motorpoint's • Identify and map out the core tolerated or treated. emerging risks. Our strategy for elements of the emerging risk, 4. Monitor the development of risks emerging risks is as follows: including ownership. over time through tracking key risk indicators. • Hold workshops with risk Identiication 5. Report back to the SLT and owners to assess the level of The following activities are Board through the Group Risk the potential risk. completed to identify potential and Compliance Committee to • Identify potential mitigating emerging risks: ensure risks are being managed actions. in line with risk appetite. • Report on emerging risks to the Audit Committee. Emerging risks for Motorpoint: MONITOR REPORT Group risk register review by Risk and Compliance Committee RESPOND Identify mitigating ASSESS IDENTIFY ASSESS Document in activities/ Plan future actions Assess net risk register Identify risk Assess gross risk controls (if outside risk risk appetite) REPORT Functional risk register reviewed by risk owner (SLT member) 63Motorpoint Group PLC | Annual Report and Accounts 2023 ## RISK MANAGEMENT CONTINUED ## EMERGING RISKS FOR MOTORPOINT: Dynamic risk | Risk and impact Commentary | | assessment | | --- | --- | --- | | 1. Used car ownership is replaced | We operate a highly lexible approach and business | Decreasing | | by a subscription based service | model. Whilst the Society of Motor Manufacturers and | | | which oers convenience and | Traders (‘SMMT’) states that the case for private vehicle | | | cost predictability. | ownership remains strong, we are mindful that a potential | | adaptation in the future would not be out of reach for the business. | 2. Motorpoint does not adapt | We are already upgrading infrastructure with increased | Decreasing | | --- | --- | --- | | eectively to infrastructure | charging points, training of our preparation team and | | | requirements for increased demand | ensuring that customers have all of the information | | | for zero emission vehicles (and | required over the potential decision to purchase a zero | | | other climate related transition | emission vehicle. | | emergentrisks). | 3. Motorpoint does not adapt to | Currently, the technology does not indicate a change | Decreasing | | --- | --- | --- | | new technologies surrounding | to the ownership or change in the use case for private | | | autonomous vehicle driving. | vehicles in the UK. As noted in the irst emerging risk, | | we have a highly adaptable business model and would consider a range of mitigations should this risk increase in likelihood. | 4. New or existing suppliers choose | | We recognise that the barriers of entry to the market for | Stable | | --- | --- | --- | --- | | | to sell used vehicles directly to | some of the largest suppliers are lower than a start-up | | | | end users. | entity. However, we are conident that our market share | | would continue to grow by continuing to be irst for Choice, Value, Service and Quality for our customers. | 5. An industry disrupter could ind a | We are conident that by continuing to invest in our brand | Stable | | --- | --- | --- | | way to sell a used car from person | and oering the best Choice, Value, Service and Quality | | | A to person B without taking | for our customers that we would remain a trusted retailer | | | ownership i.e. a connection charge / | for used cars. | | agent mechanism. Principal risks and uncertainties Details of our principal risks and uncertainties are shown on the following pages. This includes the key mitigating activities in place to address them. It is recognised that the Group is exposed to risks wider than those listed. Wedisclose those we believe are likely to have the greatest impact on our business at this moment in time and which have been subject to debate at recent Board or Audit Committee meetings. How the Board manages risk The Board and each of its delegated committees operate to a prescribed meeting agenda to ensure that all relevant risks are identiied and addressed as appropriate. Key management information is reviewed to prescribe operating controls and performance monitoring against the Company’s strategy and business plans. 64 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements The Non-Executive Directors Changes to principal risks have particular responsibility The Group operates a four lines of During FY23 the Group Risk for monitoring the inancial defence model across its internal and Compliance Committee and operating performance, to controls. These are summarised and the Board continued with ensure that progress is being asfollows: its role of managing the Group made towards our agreed goals. principal risks and where outside The Board’s responsibilities of appetite, setting out and also include assessing the monitoring mitigations to bring 1st line eectiveness of internal controls the risks within appetite. Operational and and the management of risk. There were no new emerging management controls The Board’s annual review • Site management with or principal risks in the year | of the eectiveness of | conirmed by the Board and | | appropriate team structure | | --- | --- | --- | --- | | risk management and | the Group Risk and Compliance | | and dedicated leadership | | internalcontrols | Committee, although the Board has | | team reporting line | | | recognised that FY22’s ‘economic | • Visible, championed values | | During the year, the Board vulnerability’ risk required review and expected behaviours considered all strategic matters, and as such has been renamed to • Application of Company received key performance ‘business resilience’ in FY23. The policies and procedures information on operating, key reason behind the change inancial and compliance matters • Employee induction, training was to more accurately describe and reviewed the results of and ongoing support the risk faced by the Group; there corresponding controls and risk • Executive and leadership are a number of external factors management. The Board received team oversight which could aect the Group wider from the Audit Committee and than just an economic downturn the Executive’s Group Risk and or recession. The principal risk to Compliance Committee timely mitigate is ensuring that the Group information and reports on all remains resilient in the face of any 2nd line relevant aspects of risk and external challenge whether that is Risk and compliance corresponding controls. We an economic downturn, pandemic monitoring reviewed all of our key Company or climate related physical risk • Compliance and Data policies and ensured that all crystallisation. Protection Oicers matters of internal control • Operational audit activity received adequate Board scrutiny With respect to climate change, and debate. At Board meetings, • Risk management the Group Risk and Compliance and informally via the Chair, all framework Committee actively manages and Directors had the opportunity to • External specialists monitors climate change risk within raise matters of particular concern engaged to monitor and the scope of its activities. This forms to them. There were no unresolved report on compliance part of the continued commitment concerns in the year. operations by the Board and the Committee to integrate the identiication and We concluded that appropriate ongoing management of climate controls are in place and risks with the Company’s risk functioning eectively. The management processes set out 3rd line Board considers that the Group’s in the Group Risk Management Internal audit systems provide information Framework. The summary risk • Open culture of challenge which is adequate to permit register in respect of climate to existing processes and the identiication of key risks change has been set out in our whistleblowing hotline to its business and the proper TCFD disclosure on pages 56 and assessment and mitigation of • The work of internal audit, 57. The register sets out how our those risks. testing irst and second speciic climate risks relate to the lines of defence Based on the work of the Audit principal risks. All of our climate and Risk and Compliance change risks identiied are being Committees, the Board has managed within the scope of our performed a robust assessment principal risks set out on pages 67 to ensure that: (i) the principal 4th line to 72. risks and uncertainties facing External assurance the Group’s business have been • The work of the external identiied and assessed and are auditor and other aligned to the Group’s business independent external strategies; and (ii) appropriate assurance providers mitigation is in place. 65Motorpoint Group PLC | Annual Report and Accounts 2023 ## RISK MANAGEMENT CONTINUED Viability Statement In accordance with the UK Corporate Governance Code 2018, the Board has assessed the prospects of the Group over a period in excess of 12 months from the date of signing the Group Finance statements as required by the ‘Going Concern’ provision, by selecting a three year period to the end of FY26 which takes into account the Group’s current position and the potential impact ofthe principal risks and uncertainties as set out on pages 67 to 72. In making their assessment the Directors considered the Group’s current balance sheet and operational cash lows, the availability of facilities, and stress testing of the key trading assumptions within the Group’s plan. Three scenarios were modelledwith the outcomes as follows: Scenario Outcome Base case The Group is not in breach of any inancial covenants and is not in a drawdown position on the RCF at the end of the viability period. Based upon the Group’s most recent approved forecasts. Group is able to meet all forecast obligations as they fall due. Sensitised The Group is not in breach of any inancial covenants and is not in a drawdown position on the RCF at the end of the viability A severe, plausible, downside scenario including reducing period. The Group is able to meet all forecast obligations as they revenue (26% from base case) and incorporating an above fall due. inlation cost increase of 17% from base case. Reverse stress test This scenario is designed to result in a covenant breach within the assessed viability period. A scenario created to model the circumstances required to breach the Group’s banking covenants within the Management believes the combination of severe downsides to viabilityperiod. be remote, and that there are numerous mitigating factors over and above those built into the reverse stress test modelling, The Board considered the potential impacts in preparing the which the Board would consider to avoid a covenant breach. stress test. The below scenario was analysed: Reducing revenue (33% decrease from the base case) and increasing ixed costs (32% increase over and above the forecasts in the base case). The selection of the assumptions for the sensitised case is inherently subjective, and whilst the Board considered these assumptions to relect a downside scenario, the future impact of economic downturn, interest rate rises or inlating overhead costs is impossible to predict with absolute accuracy. Whilst the same applies to the reverse stress test, we note that this scenario is speciically designed to demonstrate the point at which the covenants breach during the viability period. The reverse stress test relects, in the Board’s opinion, a remote circumstance and numerous mitigating factors could be implemented to avoid a covenant breach in this scenario. Scenario modelling has been considered throughout the year, and at year end, by management to formulate response options against moderate or severe downturns in sales volumes, potential margin pressures and possible cost challenges. Post year end, the Group maintained its available headroom by successfully extending its terms on its revolving credit facility, which stands at £29.0m. The Group also has an uncommitted overdraft facility of £6.0m, which remains in place and was undrawn at the year end. Both are until June 2026, with the option to extend for two further one year extensions if both parties are agreed. With respect to the Group’s stocking facilities these are unchanged from FY22 at £195.0m, which the Board deem appropriate given current market conditions over the stabilisation of vehicle price inlation. In the eventuality of a period of prolonged economic downturn resulting in material reductions in sales volume or prices as well as rising overhead costs, it is possible that the Group would need to negotiate changes to its current banking covenants, but such an extreme downturn is not currently considered plausible. The Group continues to consider and monitor further potential mitigation actions it could take to strengthen its cash position and reduce operating costs in the event of a more severe downside scenario. Such cost reduction and cash preservation actions would include but are not limited to: reducing spend on speciic variable cost lines including marketing and store trading expenses; team costs, most notably sales commissions; pausing new stock commitments; and extending the period for which expansionary capital spend, dividends and share buybacks are suspended. The Group has continued to demonstrate a lexible approach to trading and despite the ongoing constriction in the supply of nearly new vehicles, which is expected to continue into FY24, we have been able to use our market position to access more stock to satisfy customer demand, both online and in store. The Directors have also made use of the post year end trading performance to reconirm that no stores require an impairment provision. While only a short period has passed since the year end, this evidence does not suggest the need for further provisioning was required at year end. Based on this assessment, the Board conirms it has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 31 March 2026. The Board has determined that the three year period constitutes an appropriate period over which to provide its Viability Statement. This is the period detailed in our Strategic Plan which we approve each year as part of the strategic review. Whilst the Board has no reason to believe the Group will not be viable over a longer period, given the inherent uncertainty involved we believe this presents users of the annual report and accounts with a reasonable degree of conidence while still providing a medium term perspective. 66 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report ## PRINCIPAL RISKS Governance Financial Statements ## AND UNCERTAINTIES Risk and impact Mitigating controls Progress made in FY23 Competition, Market and Customers | The UK vehicle market is highly | • Continue to oer an omnichannel proposition. | | • Increased our market share | | | --- | --- | --- | --- | --- | | competitive, and customers | • Continue to compete via our business model’s | | | in new areas through two | | have a broad choice of retailers, | | consistent focus on Choice, Value, Service and Quality; | | new stores in the year, and | | some of which oer comparable | | each of these cornerstones is built into the business | | a further store opened in | | products. The market continues to | | operation and reporting. For example, customer | | May 2023. | | see consolidation and innovation, | | satisfaction ratings are used in the calculation of all | • Increased brand | | | through which our competitors | | bonuses or commissions across the business. | | awareness through | | have progressed their propositions. | | | | renewed investment | • Signiicant investment in bringing brand marketing, digital engineering, data insight capability in house and re-positioning of Concurrently, customer to raise awareness of Motorpoint and meet customer our marketing strategy, expectations and buying needs, including with respect to EVs and climate including a new nationwide patterns are evolving, with the change related data, such as emissions produced by TV advert campaign. traditional research and purchase cars that are sold. • Restructure of our internal channels becoming ever more • Investment in supply chain capacity and capability, sales reporting structure, inluenced by digital media, and delivery of productivity improvements to enable including the appointment peer recommendations and us to compete eectively and allocate resource to of three regional Retail convenience. There is also a growth driving activity. Directors helping to drive market risk identiied in respect the best outcomes for our of climate change aecting • Commission regular customer insight reports to track customers. consumerchoice. performance against the market, competitors and other key indicators. Failing to stay ahead of the market or to adapt to changing customer behaviours faster than the competition could undermine our ability to meet our objectives. Brand and Reputation In order to maintain our position • With a focus on the quality of the vehicles we sell, • New distinctive website as the UK’s leading omnichannel we launched a major new campaign to reinforce our creative and functionality used vehicle retailer we must brand positioning and raise brand awareness. Our mean we can more continue to invest in engaging new strapline will allow us to build on this investment eectively communicate brand and digital marketing and create a powerful point of dierence versus the our core value campaigns, as well as innovating competition. propositions of Choice, the website experience, to ensure • Following a strategic review, Motorpoint has taken the Value, Service and Quality. that Motorpoint is the primary decision to invest signiicantly in its in house digital • Customer satisfaction, destination for existing and new marketing capabilities rather than rely on an agency measured using the customers when starting their model. This improved capability has already started NPS system, sits at the nextvehicle purchase journey. to deliver tangible results with improved campaign heart of our operations performance and ROI but also medium term strategic and is subject to regular Understanding the motivations opportunities. scrutiny across all levels and needs of our current and • New roles in both Product Development and Product of thebusiness. future customers is paramount. Design have enabled the business to increase the • We closely monitor Werecognise and welcome the pace and complexity of new product features released customer perceptions fact that customers are looking on the website. With all aspects of the creative, using both qualitative and for a trusted brand when buying design and build functions under the Company’s quantitative feedback a used car. Ensuring we can control, we fully believe we will be able to increase and respond quickly communicate at scale our industry the opportunities to delight both new and returning wherepossible. leading proposition is vital to customers. protect and position, especially in light of recent new entrants to themarket. Dynamic Risk Assessment Increasing Decreasing Stable 67Motorpoint Group PLC | Annual Report and Accounts 2023 ## PRINCIPAL RISKS ## AND UNCERTAINTIES CONTINUED Risk and impact Mitigating controls Progress made in FY23 Brand and Reputation continue d Well documented challenges • We recognise the around vehicle supply, inance importance of regularly and the transition to EVs mean we assessing and testing have to maintain an active dialogue the resilience of our on these subjects to inform and internal and external reassure our customers and when communication appropriate, enable customers to protocols in the event delve deeper either via our website of a ‘reputational PR’ or social channels. incident. This approach is continuously under With reputation taking years to review and we are also build but potentially days to lose, looking at ensuring we we recognise that we are always have a robust business at risk of unwanted traditional and recovery communication social media scrutiny which can framework in place. negatively impact our reputation. • New roles in Insight and Analytics, as well as new technology partners, have signiicantly increased our capability to unlock additional growth opportunities. Availability and Terms of Customer Finance Vehicle sales volumes rely on our • Continue to drive for the best outcome for the • Customer inance oering customers being able to access customer across our product range. held for a signiicant aordable credit lines. As such, the • Constantly monitor the market and emerging trends. portion in the year Company is exposed to the risk despite increases in the • Work in conjunction with our partners to keep of lending institutions reducing, cost of money. our consumer credit oer relevant, competitive terminating, or materially altering • FCA Consumer Duty andviable. the terms and conditions on which controls review, working • Where possible reinvest in the quality of the customer they are willing to oer consumer with partners to ensure oer, preferring to build its appeal rather than credit to the Company’s customers. our products provide the maximise our commission rates. best possible outcome for Commission income generated our customers. by the Company acting as a regulated credit broker could be impacted if either the number of such arrangements reduces, or the structure and amount of commissions earned is altered. 68 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Risk and impact Mitigating controls Progress made in FY23 Supply Chain Disruption Sales / proitability and customer • Use of a broad spread of supply channels, within each • Home delivery and satisfaction could be impacted by of which are longstanding relationships. market share proposition supply chain disruption or loss of • Employment of an experienced buying team which is improved with two new access to key suppliers. responsible for maintaining an eicient and eective stores opening in the supply chain. year and a further store in This includes potential eects from May 2023, ensuring more • Able to utilise our buying criteria within the scope of our increased risks in this area such as target markets are within retail proposition (age and mileage of vehicles) to access the continued situation in Ukraine, a 30 minute drive of a more supply if required. which could aect supply in the Motorpoint store. motor trade, as well as the impacts • Business continuity plans in place for all Motorpoint • Full procurement review from the historic semiconductor physical locations. undertaken in the year supply issue. • We seek to limit dependency on individual suppliers by highlighting key areas for actively managing key supplier relationships. Potential long term threats in this the business to be able to area from climate related risks are operate more eiciently. also included within the scope of • Investigative work this risk. reviewed on developing the sustainability of our supply chain. • Negotiation with our main logistics provider, strengthening SLAs. Business Resilience Failure to withstand the impact of • Internal control and risk management process in place to • Continued strength in the an event or combination of events identify and manage risks (including emerging risks) that inancial position of the that signiicantly disrupts all or may impact the business. This includes horizon scanning Group through banking a substantial part of the Group’s for potential risks and early identiication of mitigations facility which was extended sales or operations. against potential rising costs, falling sales volumes and post year end. business readiness in the event of shutdowns. • Successful recruitment of This risk includes the risk of a lack • Conservative inancial approach – resilience and a skilled COO targeting of business resilience in the event lexibility built into the operating model, balanced levels greater eiciency, and of: external economic pressures of structural debt, low risk property portfolio and ‘value sustainable operating and inlation causing signiicant for money’ mentality. procedures. reduction in UK Consumer • Strong and united Board and Management team • Scenario planning work spending, further risks of in place, experienced managers in key roles and completed covering the economic shutdowns from a new committed colleagues. business’s readiness for or resurgent pandemic, economic • Strong values – emphasising ’long term thinking’ the impacts of climate downturn due to global conlict and ‘acting like owners’ – which Board and senior change, including an causing material price rises and management are required to role model, embedded in anticipated increased energy price increases, climate the business through recruitment and appraisal, and demand forelectric related disruption, and material colleague communications. and alternatively fuelled cost inlation. vehicles. • Strong relationships maintained with key stakeholders (shareholders, colleagues, customers, suppliers, community). • Investment in the Motorpoint brand and diversity of routes to market provide lexibility through our omnichannel approach. • Business continuity plans in place and kept up to date for stores, operations and technology. • Forward planning by ESG Committee and Head of Sustainability to plan for potential climate related economic threats from increasing cost of carbon. • Insurance cover in place to cover key risks, where applicable. Particular focus on cash low management. • Expert third party advisers in place (e.g., corporate PR, corporate, banking, legal) to assist. Dynamic Risk Assessment Increasing Decreasing Stable 69Motorpoint Group PLC | Annual Report and Accounts 2023 ## PRINCIPAL RISKS ## AND UNCERTAINTIES CONTINUED Risk and impact Mitigating controls Progress made in FY23 Finance and Treasury | Growth constrained by lack | • Motorpoint uses a selection of inance facilities to | | • Actions continue | | | --- | --- | --- | --- | --- | | of access to capital / inancial | | fund its operations including a stock inancing facility | | to improve controls | | resource. | | secured against its retail vehicle stock. | | around stock and cash | | | • The Group has an uncommitted £6.0m overdraft | | | management including | | | | and a £29.0m Revolving Credit Facility in place until | | stock purchasing, | | | | June2026. | | forecasting and use of the | stocking facilities. • A treasury policy and set of processes are in place to govern and control cash low activities, including the • Finance leading the investment of surplus cash. actions from the procurement review • Freight and energy prices are agreed in advance undertaken in the year to where applicable, to help mitigate volatility and aid ensure relationships with margin management. suppliers are as eficient • Forward looking cash low forecasts and covenant and beneicial for the tests are prepared to ensure that suicient liquidity business as possible, with and covenant headroom exists. a number of opportunities explored for re-tenders. • Strong inancial position of the Group through stocking facilities and extension of terms on the revolving credit facility. IT Systems, Data and Cybersecurity | Operations impacted by failure to | • Formal IT governance processes in place to cover all | | • Successful recruitment of | | | --- | --- | --- | --- | --- | | develop technology to support the | | aspects of IT management. | | a new and experienced | | strategy, lack of availability due to | • Changes to IT services are managed through | | | CTO who joined in | | cyber attack or other failure, and | | a combination of formal programmes for large | | March2023. | | reputational damage / ines due to | | and complex programmes, or bespoke iterative | • Signiicant investment | | | loss of personal data. | | development methodologies for smaller | | in digital transformation | | | | scalechanges. | | is continuing, upgrading | | | • A detailed IT development and security roadmap is in | | | and replacing legacy | | | | place, aligned to strategy. | | systems. | | | • Comprehensive third party support in place for | | • Ongoing actions in | | | | | relevant technologies. | | respect of network | refresh programme, • Business continuity in place for all major systems and hardware refresh applications. programme and • Regular vulnerability scans, annual penetration testing strengthening our change with systematic methodology to treat identiied management controls. threats. • Strengthened and • Business process, authorisation controls and access renewed the data to sensitive transactions are kept under review. protection policy. • Group wide rollout of data protection training. • Recruitment of Information Security Manager. • Third party audits arranged for FY24 to conirm cyber and data privacy resilience. 70 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Risk and impact Mitigating controls Progress made in FY23 Regulatory and Compliance Fines, damages claims, and • Operational management are responsible for liaising • Continued focus in the year reputational damage could be with the Company Secretary and external advisers to from the Group Risk and incurred if we fail to comply ensure that new legislation is identiied, and relevant Compliance Committee with legislative or regulatory action taken. ensuring robust regular requirements, including consumer • Training on the requirements of the Bribery Act and oversight and review of law, health and safety, employment anti money laundering policies are in place for all compliance matters by the law, GDPR and data protection and relevant colleagues and policies are communicated to SLT. Continued to conduct the Bribery Act. all suppliers. horizon scanning processes to identify changes in • Whistleblowing procedure and independently The Company also has various FCA regulatory expectations. administered helpline which enables colleagues to permissions to carry on a range of raise concerns in conidence. • Strengthened, renewed and regulated insurance and consumer thoroughly socialised data credit activities from which it protection policy. derives income. There is a risk that • Refreshed and renewed anti increased regulation or restrictions bribery and anti corruption on the sales process or nature of policies. these products would restrict the income available to the Company. • Group wide rollout of risk and control training. People and Culture The success of the business could • Our commitment to becoming a truly amazing place • Continued Group Board be impacted if it fails to attract, to work and our application of our Virtuous Circle focus on Board and retain and motivate a diverse team is our biggest defence, ensuring we have a highly Executive Team succession of high calibre colleagues. engaged, high performing team and attrition is and talent management. minimised. • The SLT has worked with Maintaining and evolving the • Our commitment to Diversity, Equity and Inclusion has an external consultant to culture of our business (embodied been reairmed in our SLT strategy and commitments. develop our DEI strategy in our shared values) is essential • The composition of the Executive Team is regularly and have created their to delivering our strategy reviewed by the Board to ensure that it is appropriate commitments to become and ensuring the long term to deliver the growth plans of the business. an even more inclusive sustainability of our business. place to work. • The Group’s Remuneration Policy detailed in this report is designed to ensure that high calibre • New ATS and onboarding executives are attracted and retained. Lock in of systems have strengthened senior management is supported by awards under the our proposition, making Long Term Incentive Plan. us more attractive to candidates and provide • Monitoring of key risk indicators such as retention rate a better experience %, employee satisfaction through the b-Heard surveys. toapplicants. • Brought forward our living wage review and increased the Motorpoint living wage in line with the Real Living Wage foundation’s October 2022 review. • Further discount oered this year (10%) for the annual Share scheme programme to all employees. • Set up and launch of ‘Workplace’, our new engagement platform for all team members. Dynamic Risk Assessment Increasing Decreasing Stable 71Motorpoint Group PLC | Annual Report and Accounts 2023 ## PRINCIPAL RISKS ## AND UNCERTAINTIES CONTINUED Risk and impact Mitigating controls Progress made in FY23 Health, Safety and Welfare The risk that accidents, hazards • Health and safety training for all new starters, • Implemented new expert third or incidents are caused by unsafe with additional role speciic training for party relationship to assist with practices at work, resulting in employees in stores. managing our Health & Safety injury or death to customers, • Incident management processing to ensure Risk, working alongside existing employees or third parties. major incidents are dealt with appropriately third party relationships. and problems are logged and actively • Ongoing actions from six progressed to resolution. monthly insurance inspections • Undertake risk and control assessments to of the Lifting Operations and monitor compliance. Lifting Equipment Regulations and periodic inspection and • Continually monitor our mandatory regulatory maintenance under Provision training to ensure that all colleagues are and Use of Work Equipment kept informed. Regulations. • Incidents are reported online, via a reporting • Ongoing actions from incident tool. Line management deal with minor reporting included within incidents. Major incidents are escalated to the monthly Board submissions and SLT who are supported by third party expertise. also discussed within monthly • Risk assessment is managed in the following Operations Manager Health and ways: line management in the stores have a Safety Governance including number of online risk assessment checklists deep dive into causations, issues to verify the relevant controls are in place; and arising / lessons learnt and best higher level risk assessments are carried out on it solutions. workshop activities by an expert third party – • Ongoing actions from including ‘Hand Arm Vibration’ and ‘Control of strengthened and enhanced Substances Hazardous to Health’. Fire Risk Assessment conducted • A separate, expert third party also carries out across all stores in FY23. higher level risk assessments covering store transport safety, gates and barriers, as well as ire risk assessments. Dynamic Risk Assessment Increasing Decreasing Stable 72 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report ## NONFINANCIAL Governance Financial Statements ## INFORMATION STATEMENT In accordance with section 414CB of the Companies Act 2006, the sections cross referred to in the table below are incorporated into this non-inancial information statement. Environmental matters Company’s employees Social matters | Stakeholder | 31 | | 41 | | 44 - 45 | | --- | --- | --- | --- | --- | --- | | | | At a glance | | Investing in our | | | engagement: | | | | communities | | | | | Our operating model | 4 - 5 | | | community begins with our team Supporting great causes 44 - 45 andenvironment Our core values 17 Anti corruption and anti 48 Streamlined Energy and 36 - 39 bribery matters | Carbon Reporting | | | Our stakeholders | | 30 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Energy eiciency | 34 - 39 | | Winning culture | | 46 | | | | actions | | | | | | Related principal risk: | | | | | | Supporting employee | 46 - 47 | | | | | | | 35 | wellbeing | | | Brand and Reputation; | 67, 70, 71 | Going green Economic Vulnerability; In addition, our talent team are The Company has various Regulatory and working on business projects focused employee centric policies and Compliance on improving the sustainability of guidance including: Employee the business and our impact on the Handbook; HR Policies including Respect for human rights | environment. | equal opportunities; anti bullying | | | | --- | --- | --- | --- | | | and harassment; whistleblowing; | Real Living Wage | 32 | | Related principal risk: | enhanced maternity leave; paternity | | | | | | Modern slavery | 49 | leave; health, safety and welfare; Brand and Reputation; 67, 71 data protection; and privacy. Treating customers fairly 48 Regulatory and Compliance Related principal risk: Related principal risk: People and Culture; 70, 71 Brand and Reputation; 67, 71 IT Systems, Data and Regulatory and Cybersecurity Compliance; People and Culture Anti corruption Whistleblowing hotline, 48 anti corruption and anti bribery Related principal risk: Regulatory and 71 Compliance Investment case 6 - 7 Non-inancial KPIs 23 Business model 8 73Motorpoint Group PLC | Annual Report and Accounts 2023 Motorpoint Group PLC | Annual Report and Accounts 202374 Strategic Report Governance Financial Statements ## Governance 76 Board of Directors 78 Introduction to governance 79 Corporate governance report 82 Audit Committee report 86 Nomination Committee report 90 ESG Committee report 92 Remuneration Committee report 94 Remuneration policy 102 Annual report on remuneration 109 Directors’ report 114 Statement of directors’ responsibilities Motorpoint Group PLC | Annual Report and Accounts 2023 75 ## BOARD OF DIRECTORS ## Experienced ## team ## delivering ## long term ## value John Walden Mark Carpenter Independent Non-Executive Chief Executive Oicer Chair and Chair of the Nomination Committee N N E APPOINTMENT January 2022 April 2016 BACKGROUND AND CAREER | John has held prior roles including | Mark was appointed as Chief | | --- | --- | | chair of Naked Wines plc, chair | Executive Oicer in May 2013 | | of the Jersey parent company of | following two years as CFO, | | Holland & Barrett International, and | and has almost 20 years’ | | non-executive director of Celine | experience in motor retail. | | Jersey Topco Ltd, the Jersey holding | Mark was previously Finance | | company of Debenhams. John was | Director of Sytner Group | | also an executive director at FTD | Limited from 2005 to 2010. | | Companies. John served as CEO | Prior to this, Mark was with | | of Argos and its parent company | Andersen, where he qualiied | | Home Retail Group plc, and has held | as a Chartered Accountant. | several senior roles with Best Buy Co. including EVP and president of the internet division. John has been a driving force in omnichannel and consumer driven retailing, as well as leading digital and transformational change, both in the UK and US. EXTERNAL ROLES Since March 2021, John has been None the chair of SnowFox Topco Ltd, the Guernsey topco responsible for Yo Sushi. John is also the Founder of Inversion LLC. In March 2023, John was appointed as Independent Non-Executive Director and Non-Executive Chair Designate of ScS Group Plc, and will take on the role of Non-Executive Chair of ScS on 30November 2023. 76 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Committee membership key A Audit R Remuneration N Nomination E ESG Committee Committee Committee Committee Committee Chair Chris Morgan Mary McNamara Adele Cooper Keith Mansield Chief Financial Oicer Senior Independent Non- Independent Independent Non-Executive Executive Director and Chair of Non-Executive Director Director and Chair of the the Remuneration Committee Audit Committee E A R N E A R N E A R N E APPOINTMENT January 2021 May 2016 (appointed as March 2020 May 2020 SeniorIndependent Director inOctober 2016) BACKGROUND AND CAREER | Chris was appointed Chief | Mary was CEO of the | Adele has extensive marketing | Keith was appointed to the | | --- | --- | --- | --- | | Financial Oicer in January | commercial division and | and senior leadership | Board of Motorpoint Group | | 2021, and is also the Company | board director of the Banking | experience, having worked at | Plc as Independent Non- | | Secretary for Motorpoint | Division at Close Brothers | some of the world’s leading | Executive Director in May | | Group plc. Chris was formerly | Group Plc. She spent 17 | technology companies, | 2020. A Chartered Accountant | | group inance director at | years with GE in a number of | most recently at Pinterest | by background, Keith brings | | Speedy Hire Plc. Prior to this | leadership roles, including | from June 2015 to December | extensive accountancy | | Chris held senior inance | CEO of the European Fleet | 2019. While at Pinterest, | experience, having worked | | leadership positions at Go | Services business. Mary has | Adele was responsible for the | at PwC for over 30 years, | | Outdoors and Tesco, where | also spent time with Skandia | UK and Ireland, overseeing | during which time he served | | he was latterly the inance | and 14 years at Harrods. | strategic, commercial and | as Chair of PwC in London | | director for the Czech | | operational management. | responsible for assurance, tax | | Republic and Slovakia. Chris | | Prior to this, Adele has been | and advisory services. As a | | is a Fellow of the Institute of | | with Facebook and Google in | partner for 22 years, he has led | | Chartered Accountants in | | a lead global relationship role | services to public and private | | England and Wales. | | and a variety of regional and | companies across a range of | | | | global lead roles in marketing | industry sectors. | andoperations. EXTERNAL ROLES None Chair of the Remuneration Adele is Chief Revenue Keith is the Senior Independent Committee and member Oicer at &Open and a Non- Director of Tritax Eurobox of the Nomination and Executive director of Conjura plc, where he chairs the Audit Governance Committee of IrelandLimited. Committee and is a member of OSB Group plc. the Management Engagement Committee and Nomination Committee. Keith is also the Senior Independent Director and Chair of the Audit Committee of Digital 9 Infrastructure plc, Chair of Albemarle Fairoaks Airport Limited and a Non-Executive director on the boards of Martins Investment Holdings Ltd, Martins Development Holdings Ltd and Martins Financial Holdings Ltd. 77Motorpoint Group PLC | Annual Report and Accounts 2023 ## INTRODUCTION TO GOVERNANCE Compliance statements Throughout the year ended 31 March ## Chair’s introduction 2023, the Company has complied with all the provisions as set out in the 2018 Corporate Governance DEAR SHAREHOLDER Code (the ‘2018 Code’) (a copy of which is available on the Financial Reporting Council’s website at I am delighted to present my and the environment. We maintain www.frc.org.uk) except for two. Corporate Governance review for an active dialogue with shareholders Firstly, with respect to the CEO’s Motorpoint for FY23. The aim of this throughout the year and listen to pension contributions. As set out in report is to explain Motorpoint’s views of representatives of investors the Remuneration Committee report, governance framework and outline and inancial institutions. We also under the new remuneration policy how it was applied on a practical welcome the opportunity to answer the CEO’s pension contributions basis in the year under review. shareholders’ questions at our 2023 will reduce from 10% to 3% of salary Annual General Meeting (‘AGM’). following the 2023 AGM, to be The past year has seen the Company aligned with that of the workforce have to contend with a number ESG and comply with the 2018 Code. of economic headwinds, with the We are committed to an ESG Secondly, with respect to consulting cost of living crisis and supply agenda which aims to exceed our directly with the workforce on chain issues creating a number stakeholders’ expectations. The past remuneration matters. In the coming of challenges. As a Board, we are year has continued to accelerate year we will review our approach committed to delivering sustainable expectations for all companies to to engaging with employees on and proitable growth, and remain make good progress in this area, and remuneration matters and in committed to the delivery of our our new ESG Committee has met particular to explain how the pay for strategy that is set out earlier in this twice to develop, implement and senior executives aligns to the pay report. Despite the challenges to monitor our ESG strategy, as well practices for the workforce generally. proitability, we have made good as oversee and support stakeholder progress against our strategic engagement on ESG matters. We Our eectiveness objectives, and are continuing to look forward to further developing Every year we perform a review of increase revenues and market share. the Committee’s impact in the the eectiveness of the Board. In coming year. early 2023, we commissioned an As a Board, we are conscious external Board eectiveness review that we are accountable to all our Board changes with participation from all members shareholders and must have regard There have been no changes to of the Board. The indings show to other stakeholders such as the membership of the Board that the work we do as a Board and employees, customers, suppliers over the last year. in our committees continues to be eective. Our review also conirmed | Biographies for each of the current | that our focus in the coming year | | --- | --- | | Directors are set out on pages | will be employee engagement, | | 76 and 77. The progress in talent | as well as succession planning | | development and diversity can be | for the Board and executive | | found on page 87. | leadership and the implementation | of our revised diversity, equity and inclusionstrategy. “ The Board is committed Board priorities to delivering our Our priorities for next year are very strategic plan much focused around continuing underpinned with to build sustainable and proitable strong governance.” growth in the Group, and delivering on our strategic plan underpinned John Walden with strong governance. Chair John Walden Chair 14 June 2023 78 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report ## CORPORATE Governance Financial Statements ## GOVERNANCE REPORT Board leadership and purpose Chief Financial Oicer’s role management and the Non-Executive The Chief Financial Oicer (‘CFO’) is Directors. The Company Secretary The role of the Board responsible for the Group’s inancial is responsible for ensuring that The Board sets the Company’s activities, including control, planning the Board operates in accordance strategic aims and ensures that the and reporting, and also contributes with the Company’s corporate necessary resources are in place to the broader management of the governance framework. to allow the Company’s objectives Group’s business. The CFO supports to be met, in a way that enables the CEO with the development, The appointment and removal of the sustainable long term growth. It implementation and tracking of the Company Secretary is a matter for is also responsible for corporate Group’s strategy. the whole Board. governance and the overall inancial performance of the Group. The Senior Independent Director’s role Matters reserved for the Board Board establishes the Company’s The Senior Independent Director To retain control of key decisions and culture, values and ethics and it acts as a sounding board to the Chair ensure that there is a clear division is important that it models the and serves as an intermediary for of responsibility between the Board required behaviours and standards, the other Directors when necessary. and the day to day running of the with all Directors devoting suicient The Senior Independent Director is business, the Board has a formal time and attention to their role. available to shareholders to assist schedule of matters reserved for its with addressing concerns that may decision. These reserved matters The current Board composition is arise and meets with the other Non- include inancial reporting, investment the Chair, three independent Non- Executive Directors (excluding the appraisal and risk management. The Executive Directors (including a Chair) at least once a year to review matters were reviewed by the Board in Senior Non-Executive Director) and the performance of the Chair. July 2022 to ensure they were aligned two Executive Directors. with the 2018 Code. The Senior Independent Director Roles and responsibilities also meets with Non-Executive Board committees The Chair’s role Directors without the Chair present The Board operates several The Chair’s primary role is the at least annually and conducts committees to support it in carrying leadership of the Board. They the annual appraisal of the Chair’s out its duties. Further information ensure that the Directors receive performance, providing feedback to about the work carried out by these accurate, timely and clear the Chair on the appraisal outputs. committees can be found on the information and are responsible following pages: for cultivating a boardroom culture Independent • Audit Committee (p.82) of honesty and openness, which Non-Executive Directors • Nominations Committee (p.86) encourages debate, challenges The Non-Executive Directors bring • ESG Committee (p.90) where appropriate, and enables the independence, and a broad mix • Remuneration Committee (p.92) Non-Executive Directors to make of business skills, knowledge and an eective contribution. The Chair experience to the Board. They Board focus during the year sets the Board’s agenda and ensures provide an external perspective The Board holds a number of suicient time is allocated for the to Board discussions and are scheduled meetings each year, plus discussion of all agenda items. The responsible for the scrutiny of the regular strategy sessions which are Chair also consults with the Non- executive management on behalf usually held o site. The meetings Executive Directors, in particular of shareholders. The Non-Executive were held in a hybrid format this the Senior Independent Director, on Directors constructively challenge year, with some attended in person matters of corporate governance Board discussions and help develop and others held virtually. and ensures all Directors are made proposals on strategy. At least aware of any major shareholders’ annually, the independent Directors Key areas of focus during the issues and concerns. meet without the presence of the year were: Executive Directors. The Board is satisied that the Strategy Chair fulils their responsibilities in Non-Executive Directors monitor • The Board reviewed progress enabling the Board to make the reporting of performance against the Strategic Plan regularly sound decisions. and ensure that the Company is during the course of the year operating within the governance Chief Executive Oicer’s role • Investor relations and and risk framework approved by The Chief Executive Oicer (‘CEO’) communications the Board. is responsible for the day to day • Strategic growth opportunities running of the Group’s business, such as the opening of new The Company Secretary’s role including the development and stores, technology and marketing The Company Secretary ensures implementation of strategy and investment, eiciencies and that eective communication decisions made by the Board, as exploration of other growth lows between the Board and its well as the operational management opportunities committees and between senior of the Group. 79Motorpoint Group PLC | Annual Report and Accounts 2023 ## CORPORATE GOVERNANCE REPORT CONTINUED | Financial | | People, talent and culture | | The CEO, Mark Carpenter, owns | | --- | --- | --- | --- | --- | | • Approved the full year results | | • Succession planning and talent | | approximately 9.8% of the shares of | | | announcement and the annual | | development for all senior roles | the Company. Mark Carpenter was | | | report for the 2023 inancial year. | • Reviewed the results of the | | considered by his fellow Directors | | | In doing so, the Board considers | | engagement survey | to be independent in character and | | | that the annual report, taken as | | | judgement in performing his duties | • Ensured safe and comfortable a whole, is fair, balanced and during the periods of their tenure in working environments understandable, and provides the year. The Board is fully conident • Reviewed the staing structure the information necessary for that, in the very unlikely event of a and implemented associated shareholders to assess the conlict emerging between Mark rationalisation, resulting in 20 Group’s and Company’s position, Carpenter’s duties as a Director and redundant posts performance, business model his interests as a shareholder, he • Implemented a Restricted Share and strategy would absent himself from the Board Award for eligible sta • Continued suspension of the discussions in question (and the • Implemented an SAYE Share payment of any dividends Board would ensure that he does so). Plan for eligible sta for the • Half year results, full year results three year period commencing The terms and conditions of and trading updates February2023 appointment of the Non-Executive • Review of Group cash position Directors are contained within their and forecasting, and post year Governance, compliance Letters of Appointment. The terms end the approval of the banking andethics of appointment for the Directors extension through to June 2026 • Approved AGM business such as conirm they are expected to devote • Monthly performance reporting the Notice of Meeting and related such time as necessary for the and review ancillaries proper performance of their duties. • Commissioned an external Board The Board reviews and approves as Internal control and risk evaluation, reviewed the report necessary any additional external management and recommendations and appointments the Directors may • Performed the annual review agreed an action plan look to obtain. During FY23, John of the eectiveness of internal • Assessed the independence Walden was appointed to the board control, risk identiication ofallDirectors of ScS Group Plc, and will take on andmitigation • Reviewed and updated the the role of Non-Executive Chair of • Carried out a robust assessment Terms of Reference for the ScS on 30 November 2023. Prior to of the emerging and principal Audit Committee, Remuneration this appointment, consideration was risks facing the Group. Further Committee and ESG Committee given to the potential impact this information on these principal would have on his role as Chair of risks, the procedures in place Board independence and Motorpoint Group plc, and whether to identify emerging risks and there was a risk of overboarding appointment terms how these are being managed or in line with current governance mitigated can be found on pages The Board has reviewed the practice. It was deemed that there 62 to 72 independence of each Non- was no risk of overboarding and Executive Director and considers • Approved the Viability Statement no concerns were identiied with each of them to be independent as disclosed in the FY23 annual thisappointment. of management and free from report, which sets out that the business or other relationships that Group will be able to continue in The CEO and CFO do not currently could interfere with the exercise operation and meet its liabilities have a non-executive directorship of independent judgement. The as they fall due over the next on any other listed company board. Company meets the requirement three years. The Board deemed under Provision 11 of the 2018 a three year period to the end Board meetings Code that at least half of the Board, of FY26 would be appropriate, The Board met regularly to excluding the Chair, are Non- taking into account the Group’s discharge its duties eectively. Executive Directors whom the Board current position and the potential Directors are provided with meeting considers to be independent. The impact of the principal risks and papers approximately one week Board believes that any shares in uncertainties in advance of each Board or the Company held personally by • Considered and approved the committee meeting. Members of a member of the Board serves to adoption of the going concern the Senior Leadership Team are align their interests with those of basis of accounting in preparing regularly invited to attend Board the shareholders. the half and full year results meetings to present on their speciic • Approved updates to the area of responsibility. treasurypolicy 80 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Board and committee attendance FY23 The Board has regular scheduled meetings throughout the year. Directors’ attendance at Board and committee meetings during the year is outlined below: Board Audit Nomination Remuneration ESG Director (9 meetings) Committee (3) Committee (1) Committee (6) Committee (2) Mark Carpenter 9 – 1 – 2 Chris Morgan 9 – – – 2 John Walden 9 – 1 – – Mary McNamara 9 3 1 6 2 Keith Mansield 9 3 1 6 2 Adele Cooper 9 3 1 6 2 Annual General Meeting The 2023 AGM will be held on 26July 2023. | The Notice convening the 2023 AGM | Board training and development | | --- | --- | | will be circulated to shareholders | Directors are continually updated on | | separately, along with details on | the Group’s business, the markets | | how shareholders can still raise | in which we operate and changes | | questions to the Board in advance. | to the competitive and regulatory | | We will ensure that shareholders are | environments through presentations | | kept informed using the Notice of | and brieings to the Board from | | Meeting, our website, and relevant | Executive Directors and the Senior | | regulatory announcements in | Leadership Team. | duecourse. Directors received brieings from | Conlicts of interest | the Company Secretary during | | --- | --- | | The Company’s Articles of | the year on governance and | | Association, in line with the | compliance matters and relevant | | Companies Act 2006, allow the | legislative changes. | Board to authorise any potential conlicts of interest that may arise Relations with shareholders and impose limits or conditions as All shareholders have access to appropriate. The Board has a formal the Chair and the Senior Non- process for the Directors to disclose Executive Independent Director, any conlicts of interest and any who are available to discuss any decision of the Board to authorise a questions which shareholders may conlict of interest is only eective have in relation to the running of if it is agreed without the conlicted theCompany. Director(s) voting or without their votes being counted. In making The Board recognises the need such a decision, the Directors must to ensure that all Directors are act in a way they consider in good fully aware of the views of major faith will be most likely to promote shareholders. Copies of all analysts’ the success of the Group. research relating to the Company are circulated to Directors upon Independent advice publication. The Company receives The Directors may take independent a monthly Investor Relations report professional advice, if necessary, at which includes an analysis of the the Company’s expense. Company’s shareholder register. John Walden Chair 14 June 2023 81Motorpoint Group PLC | Annual Report and Accounts 2023 ## AUDIT COMMITTEE REPORT ## Audit Committee ## Chair’s statement COMMITTEE DEAR SHAREHOLDER GOVERNANCE | | I am pleased to present the report | Risk management and internal | | --- | --- | --- | | | of the Audit Committee (the | control continues to be a priority | | Committee membership | ‘Committee’) for FY23. The principal | topic for the Group, ensuring | | | purpose of this report is to look | Motorpoint can respond with | During the year the back over the inancial year ended pace and robustly to economic Committee comprised: 31 March 2023, and describe the uncertainty, requirement for • Keith Mansield (Chair) Committee’s responsibilities and digital transformation and an • Adele Cooper activities during the year. extremely competitive marketplace. • Mary McNamara Management processes have The Committee fulils an important continued to strengthen in the The Committee met three oversight role, monitoring the year through strong recruitment, timesduring the year and eectiveness of the Group’s automation and the completion of attendance is set out in the system of internal control and the Group’s irst formal internal audit table on page81. risk management framework and plan – this is a major step forward in reviewing the integrity of the managing risk and internal control Group’s inancial reporting. The key for the Group. objectives of the Committee are to review and report to the Board and The Audit Committee has reviewed shareholders on the Group’s inancial the status of the Group’s plans for reporting, internal control and risk its irst audit and assurance policy. management systems, and on the Good progress has been made on independence and eectiveness of the planning activity which includes the external auditor. assurance mapping and gathering the views from key stakeholders. A draft policy is expected in FY24 with “ Management processes a thorough review required before have continued to inal publication. strengthen in the I would like to thank my colleagues year through strong in the Committee for their valued recruitment, automation contributions during this year and the completion of and also extend my thanks to our the Group’s irst formal colleagues within the business who have continued to embrace internal audit plan – this the Group’s shared values, whilst is a major step forward also striving for greater eiciency in managing risk and and leaner ways of working in the internal control for context of an ever more competitive theGroup.” marketplace and increased economic uncertainty. Keith Mansield Audit Committee Chair 82 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Committee composition Role of the Committee • Review the adequacy and security and membership of the Company’s arrangements The role and responsibilities of the The Committee currently comprises for its employees, contractors and Committee are set out in its terms of three independent Non-Executive external parties to raise concerns, reference which were updated in FY23 Directors. in conidence, about possible and are available on the Company’s wrongdoing in inancial reporting website motorpointplc.com. The key During the year, the following or other matters objectives of the Committee are to members served on the Committee: • Review the eectiveness of risk review and report to the Board and • Keith Mansield (Chair) management and internal control shareholders on the Group’s inancial • Adele Cooper policies in relation to ESG matters reporting, internal control and risk • Mary McNamara management systems, and on the • Monitor the statutory audit of independence and eectiveness of the annual and the consolidated The Board believes that the the external auditor. inancial statements members of the Committee as a • Review signiicant inancial whole have competence relevant Further details on the responsibilities reporting issues to the sector in which the Group of the Committee are listed below: • Recommend to the Board the operates, gained from their • Monitor the integrity of reappointment of the external respective external roles, previous the inancial statements of auditor and approve their and present. Biographical details of the Company, including its remuneration and terms Committee members are set out on annual and half yearly reports, of engagement page 77. preliminary announcements and • Monitor and review the external any other formal statements auditor’s independence and In particular, the Board has relating to its inancial objectivity and the eectiveness identiied me as the member of performance, and review and of the external audit process, the Committee having recent and report to the Board on signiicant including considering relevant inancial experience for the inancial reporting issues relevant UK professional and purposes of the 2018 Code. I have and judgements which those regulatory requirements and a wealth of accounting experience statements contain having regard the appropriateness of the from my previous roles, having to matters communicated to it by provisionby the auditors of worked at PricewaterhouseCoopers the auditor non-auditservices | LLP (‘PwC’) for 30 years. | • Review the content of the annual | | | | --- | --- | --- | --- | | | | report and accounts and advise | The terms of reference authorise the | | At the invitation of the Chair of | | the Board on whether, taken as | | Committee to obtain independent the Committee, the CEO and CFO a whole, it is fair, balanced, and legal or other professional advice at attended all meetings during the understandable and provides the Company’s expense. year in order to maintain eective the information necessary and open communications. for shareholders to assess the Company’s performance, The external auditors, PwC, attend business model and strategy and meetings of the Committee and whether it informs the Board’s have direct access to the Committee statement in the annual report should they wish to raise any on these matters that is required concerns outside of the formal under the Code Committee meetings. • Keep under review the Company’s internal inancial controls systems Similarly, the Head of Internal Audit that identify, assess, manage attends for the speciic portion of and monitor inancial risks, and Committee meetings pertaining to other internal control and risk internal audit, and has direct access management systems to the Committee should internal • Review and approve the audit need to raise any concerns statements to be included in the outside of the formal context. annual report concerning internal control, risk management, including the assessment of principal risks and emerging risks, Viability Statement and goingconcern • Review reports from the internal audit function 83Motorpoint Group PLC | Annual Report and Accounts 2023 ## AUDIT COMMITTEE REPORT CONTINUED | Activities | | • The clarity and completeness | | | A provision is included based on | | --- | --- | --- | --- | --- | --- | | The Committee reviewed the | | | of disclosures in the inancial | | historical and forecast sales and | | following items since the last report: | | | statements and the context in | | potential net realisable value. The | | • Annual Report and Accounts | | | which statements are made | | Committee is comfortable based | | | to 31March 2023 and half year | • All material information presented | | | on performance subsequent to | | | results to 30 September 2022 | | with the inancial statements, | | the year end that the level of | | • Chair met and had discussions | | | including the strategic report | | inventory provision is appropriate. | | | with PwC as part of the | | and the corporate governance | • Appropriate capitalisation of | | | | auditprocess | | statements relating to the audit | | IT development costs in line | | • External audit plan and review | | | and to risk management | | with the criteria set out in IAS | | | ofeectiveness | | | | 38; in particular as this year the | | | | In addition to the above, the | | | amounts increased, following the | • Non-audit services policy Committee supports the Board in acceleration of technical strategic (‘NAS’) and reached a general completing its assessment on the investment. The Committee presumption that PwC is not adoption of the going concern is satisied based on the best placed to oer NAS, so as to basis of preparing the inancial substantiation of the requirements safeguard their independence statements. Furthermore, as part of IAS 38 that the appropriate • The Group’s prospects (going of the Committee’s responsibility accounting treatment was applied. concern and viability) to provide advice to the Board on • Tax and treasury policy the long term Viability Statement, Annual report • Corporate risk assessment the Committee performed a The Committee has undertaken including review of the key risks, robust review of the process and a review and assessment of the risk management activities and underlying assessment of the annual report in order to determine emerging risks Group’s longer term prospects whether it can advise the Board that, • Findings from the external auditor madeby management. taken as a whole, the annual report on the FY23 year end audit is fair, balanced and understandable, • Findings from the work of Signiicant matters and provides shareholders with the Internal Audit considered by the Committee information they need to assess the in relation to the inancial Company’s position, performance, Financial reporting statements business model and strategy. The primary role of the Committee In doing this the Committee In the preparation and inal approval in relation to inancial reporting is considered the following: of the inancial statements, to review with both management • The description of the business is the Committee discussed with and the external auditor, and report consistent with the Committee’s management the key sources of to the Board the appropriateness own understanding estimation and critical accounting of the annual inancial statements, judgements. The Committee • The narrative of the strategic considering amongst other matters: considered the following signiicant report fairly relects the • Whether the annual report, taken issues in relation to the FY23 performance of the Group over as a whole, is fair, balanced and inancial statements: the period reported on understandable, and provides • Inventory Valuation: Inventory is • That there is a clear and well the information necessary valued at the lower of cost and articulated link between all areas for shareholders to assess net realisable value. Margins of disclosure including going the Company’s performance, on vehicles increased in FY22 concern and viability business model and strategy. due to a global shortage of • The indings from the external The statement incorporating the semiconductors resulting in a auditor as part of the FY23 year conclusion of this assessment is reduction of the supply of new end audit included later in this section vehicles; this in turn pushed • The application of signiicant demand, and therefore price, All relevant issues relating to the accounting policies and any up for used cars. There is a Annual Report were fully discussed changes to them risk that the solving of supply at the Committee meeting in • The methods used to account shortages could lead to selling June2023. for signiicant or unusual prices reducing below cost and transactions where dierent so require a provision against The Committee has concluded that approaches are possible inventory cost. Further, in the the Annual Report, taken as a whole, • Whether the company has second half of FY23 the Group is fair, balanced and understandable adopted appropriate accounting experienced a considerable drop and that it can advise the Board as policies and made appropriate in the value of Electric Vehicles. required by the 2018 Code and other estimates and judgements, taking relevant rules and regulations. into account the external auditor’s views on the inancial statements 84 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements | Going concern and Viability | The establishment of the function has | • The Committee assesses the | | | --- | --- | --- | --- | | Statement | been well received in the business | | audit plan | | The Company is required to include | and requests for third line assurance | • All Committee members, key | | | statements in its annual report | over controls have come from a wide | | members of management, those | | relating to going concern and | range of business functions. The FY24 | | who regularly provide input into | | viability. The Committee reviewed | internal audit plan was approved in | | the Committee provide feedback | | and discussed with management | January 2023, covering a range of | | on how well PwC performed the | | and concluded that the inancial | core audits over inancial controls and | | year end audit | | statements can be prepared on a | a series of risk based reviews to be | | | • The feedback and conclusions going concern basis and that there carried out across FY24. are discussed, along with the is a reasonable expectation that conclusion regarding speciic the Group will be able to continue External auditor audit risks, with an overall in operation and meet its liabilities conclusion on audit eectiveness Independence as they fall due over the next reached. Any opportunities for There are a number of robust threeyears. improvement are brought to the policies in place, all of which aim attention of the external auditor to safeguard the independence of The Directors assessed the the external auditor. In accordance prospects of the Group over a three The Committee concluded that PwC with best practice, the external year period, which relects the provided an eective, independent audit contract will be put out to budget and planning cycle adopted and objective audit and that the tender every ten years, with the next by the Group. The assessment of the Committee was therefore satisied retender due no later than the year Group’s prospects, together with the that it had obtained a high quality ending 31 March 2027. Group’s going concern and Viability audit. The Committee agreed Statement, are set out on pages 112 to recommend to the Board the In accordance with the Auditing and 81 respectively of the report. reappointment of PwC as the Practices Board standards, the lead Group’s external auditor and a audit partner at PwC will be rotated Internal audit resolution to this eect will be every ive years to ensure continuing Following the successful expansion proposed at the 2023 AGM. independence. Mark Skedgel, the of the function with the appointment current audit partner, assumed this of the Head of Internal Audit and Non-audit services responsibility for the year ended 31 Risk in the prior year, the Group’s To further safeguard the March 2020. irst internal audit plan was approved independence and objectivity of the and carried out in FY23. A number of external auditor, non-audit services There are no contractual obligations risk based reviews were undertaken provided by the external auditor are that restrict the Company’s choice by internal audit, establishing new considered, and where appropriate of external auditor. independent third line assurance authorised, by the Committee reports for the business and in accordance with a non-audit External auditor eectiveness management agreed actions services policy. This policy limits to address control weaknesses The Committee conducts an annual the amount and type of services identiied. Internal audit’s areas of external audit eectiveness review undertaken by our auditor. Permitted review in FY23 included: each year which examines the services are subject to a cap of 70% • Balance sheet reconciliations auditor’s independence, the audit of the average of the fees paid for controls audit planning process, audit approach the statutory audits over a three • End-to-end audits of purchasing and delivery, audit team expertise yearperiod. controls for both sourcing and experience, resources, vehicles and all non-vehicle responsiveness and communication There were no non-audit fees for the expenditure in respect of the inancial year year ended 31 March 2023. audit. In order to discharge this • Sales ledger control account responsibility the Committee controls audit followed the process outlined below: Keith Mansield • Inputs to payroll controls audit • The terms, areas of responsibility, Audit Committee Chair • Bank and cash procedures audit duties and scope of work of the 14 June 2023 external auditor as set out in the engagement letter are reviewed at the Committee meetings • The Committee discusses and agrees at the planning stage the draft list of speciic audit risks 85Motorpoint Group PLC | Annual Report and Accounts 2023 ## NOMINATION COMMITTEE REPORT ## Nomination Committee ## Chair’s statement DEAR SHAREHOLDER COMMITTEE GOVERNANCE | I am pleased to present the report | eective, and that the appropriate | | --- | --- | | of the Nomination Committee (the | corporate governance standards | | ‘Committee’) for FY23. | and practices are in place. | Committee membership and attendance The Nomination Committee keeps Following the external board During the year the under regular review the structure eectiveness review, the Board’s Committee comprised: and composition of the Board and discussions identiied a number of • John Walden (Chair) its committees and ensures that the opportunities to help encourage • Adele Cooper Board and executive leadership has a diverse and inclusive pipeline of • Keith Mansield the appropriate balance of skills, executive and non-executive talent • Mary McNamara expertise and experience to support within the Company. This will be the Company. a key focus for the Committee in • Mark Carpenter (CEO) the upcoming year to ensure that In FY23, the Committee met once, momentum is maintained. The The Committee met once where it received a recruitment Committee is clear on the vision during the year and attendance update and discussed potential to promote and model an inclusive is set out in the table on ways to help promote diversity and supportive culture where every page81. within the Senior Leadership Team individual, of any identity, from any ('SLT'). There were no new Board background, feels they can be their appointments or resignations during authentic self at work, and keeps the period and the Committee those values front and centre of its remains satisied that the Board work. Further details on diversity composition is balanced and within the business can be found within the Strategic Report on pages 41 and 42. “ Diversity and inclusion All Directors are subject to election is important to us and or re-election to the Board by will remain a key focus shareholders on an annual basis at for the Committee in the Company’s AGM. The Chair, on the year ahead.” behalf of the Board, has conirmed each Director continues to be an eective member of the Board John Walden and will stand for re-election at Nomination Committee Chair the2023AGM. 86 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements | Committee responsibilities | | Activities of the Committee | | The Financial Conduct Authority | | --- | --- | --- | --- | --- | | The Committee is responsible for: | | During the year the main activities of | | (FCA) has introduced new rules | | • Board composition: The | | the Committee were as follows: | | and targets which require listed | | | Committee considers the balance | • Considered diversity within the | | companies to make disclosures | | | of skills, diversity, knowledge | | SLT and discussed practical ways | in relation to gender and ethnic | | | and experience of the Board | | in which the Board could support | diversity at Board and executive | | | and its committees and reviews | | the promotion of diversity and | management level. The targets | | | the Board’s structure, size and | | inclusion at senior levels | are that at least 40% of the Board | | | composition, including the time | | | should be women, at least one of | | | commitment required from Non- | Composition of the Board as at | | the senior Board positions should be | | | Executive Directors | 31March 2023 | | a woman, and at least one member | | • Board and executive nominations: | | | | of the Board should be from an | INED/Executive split The Committee leads on the ethnic minority background. As at Chair 1 recruitment and appointment 31 March 2023, we comply with the INED (excluding the Chair) 3 process for Directors and makes senior Board position target, with Executive 2 the SID role being occupied by a recommendations regarding any | adjustments to the composition | | woman, but have not achieved the | | --- | --- | --- | | of the Board | Diversity and inclusion | target of the Board having 40% | | | The Board recognises the | female representation or a board | • Board and executive succession importance of diversity and member from an ethnic minority. planning: The Committee inclusion in the boardroom and The Committee seeks to attract proposes recommendations to seeks to recruit Directors with varied more women and people from an the Board for the continuation backgrounds, skills and experience. ethnic minority background onto in service of each Director and Appointments are made on merit the Board through a combination ensures that the Board is well and against objective criteria, taking of targeted succession planning prepared for changes to its account of the skills, experience and and the promotion of a culture composition and that appropriate expertise of candidates. that actively celebrates diversity succession plans are in place throughout the Company. The Committee has formal terms The tables below identify the gender of reference which are available identity and ethnic diversity of on the Company’s website members of the Board and executive motorpointplc.com. management. Number of senior positions | | | | | | | | on the Board | | | Number in | Percentage | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Number of | | Percentage of | | (CEO, CFO, SID, | | | | Executive | of Executive | | Reporting table on sex/gender representation | Board members | | | | the Board | | | Chair) | Management | | Management | | Men | | | 4 66% 3 5 83% | | | | | | | | | | Women | | | 2 34% 1 1 17% | | | | | | | | | | Not speciied / prefer not to say | | | 0 0% 0 0 0% | | | | | | | | | Number of senior positions | | | | | | | | on the Board | | | Number in | Percentage | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Number of | | Percentage of | | (CEO, CFO, SID, | | | | Executive | of Executive | | Reporting table on ethnicity representation | Board members | | | | the Board | | | Chair) | Management | | Management | | White British (or other White) | | | 6 100% 4 4 66% | | | | | | | | | | Mixed / Multiple Ethnic Groups | | | 0 0% 0 0 0% | | | | | | | | | | Asian / Asian British | | | 0 0% 0 2 34% | | | | | | | | | | Black / African / Caribbean | | | 0 0% 0 0 0% | | | | | | | | | | Black British | | | 0 0% 0 0 0% | | | | | | | | | | Other ethnic group, including Arab | | | 0 0% 0 0 0% | | | | | | | | | | Not speciied / prefer not to say | | | 0 0% 0 0 0% | | | | | | | | | As part of our commitment to Diversity, Equity and Inclusion we have a number of data collection points throughout the employee experience that allow us to measure how we are doing against our objective of having a truly diverse 87Motorpoint Group PLC | Annual Report and Accounts 2023 ## NOMINATION COMMITTEE REPORT CONTINUED workforce and inclusive culture. This starts at the recruitment stage as we have an Applicant Tracking System which allows us to gather data on all applications. We will then also complete a right to work check for all hired employees and can capture data here. Finally, as part of this disclosure we have directly asked each member of the team how they identify within the outlined categories. The Board’s composition and size is kept under review by the Nomination Committee to retain an appropriate balance of skills, experience, diversity and knowledge of the Group. The Board also recognises the importance of diversity and inclusion at senior management level. The Group’s SLT is made up of eight members including the CEO and CFO. Information on initiatives on diversity and inclusion can be found in the People section of the Strategic Report on pages 41 and 42. Board and Committee Eectiveness Review The Board undertakes a formal evaluation of its performance, and that of each Director, on an annual basis. The principal committees of the Board also undertake an annual evaluation of their eectiveness in accordance with their terms of reference. In FY22 the Board identiied four key action points arising from its self-evaluation and measured the steps taken throughout the year to achieve them. An update on progress in all four areas can be found in the table below. FY22 Issue/ Recommendation Action Progress during FY23 Stakeholder Stakeholder engagement will be further The Board determined that this engagement enhanced through the development of recommendation had been achieved. a structured and suitable programme of The Board has engaged with a variety of events, meetings and / or forums to ensure stakeholders in FY23, including employees regular, quality dialogue between the Board and shareholders, as well as through its work and stakeholders. Speciic focus will be around ESG. given to understanding stakeholder views on ESG matters to ensure alignment with the Company’s ESG strategy. The Board will regularly review the list of identiied stakeholders to ensure it remainsrelevant. Company The Company Secretary has had varying The Board determined that this secretarial support levels of interim company secretarial recommendation had been achieved. support through the year. The level of Company secretarial support has been support required will be monitored to outsourced, and the FY23 board evaluation ensure good governance practices are demonstrated a signiicant improvement in consistentlyfollowed. the support provided. Quality of Board The new Chair and Company Secretary to The Board determined that this papers review the information provided in operational recommendation had been achieved. reports to ensure that the quality of Board A new format of Board papers was introduced papers addresses the appropriate topics and in FY23 and has provided additional detail has suicient level of detail. A new format will and context to Board discussions and be introduced for all Board papers to clearly decisionmaking. identify the purpose, and the ask of Board members in each case. Externally External Board evaluation to be sought during The Board determined that this facilitated Board FY23. recommendation had been achieved. evaluation The Board commissioned an independent external board evaluation in February 2023, and agreed an action plan to address areas for development and help ensure continued improvement. 88 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements In line with its discussions the previous year, in early 2023 the Board commissioned an external evaluation of the Board and its committees by Indigo Independent Governance. As Indigo also provides governance services to Motorpoint, the Board agreed that the review would be carried out by a separate team at Indigo to maintain independence and ensure a truly external view. The evaluation covered a range of matters including the balance of contributions, quality of debate and constructive challenge, senior leadership succession, stakeholder engagement, the eectiveness of agenda planning and the quality and timeliness of meeting papers. The results of the review were circulated to members of the Board and its recommendations were discussed at the February 2023 Board meeting and actions were agreed and adopted at the March 2023 Board meeting. Three speciic actions were identiied for FY24, as set out in the below table. FY23 Issue/Recommendation Action Employee engagement A programme of on site Board and Strategy sessions to be held to allow the Directors to engage directly with local teams as well as the SLT. Employee engagement updates to be scheduled at Board meetings. Succession planning Nominations Committee and Board to be allocated the necessary time and resources to proactively consider succession planning strategies in the context of both the Board and executive leadership, with a focus on developing a pipeline of quality internal candidates. Diversity, Equity and Inclusion Further develop the Diversity, Equity and Inclusion strategy, and monitor how it is being implemented. Updates to be provided at Board and/or Committee meetings in FY24. Ensure that diversity is factored into the discussion on succession planning for Board and executive roles. The evaluation established that the Board remains satisied that each Director contributes eectively to the Board and its committees. Election or re-election of Directors In compliance with the 2018 Code, all current Directors will stand for re-election at the forthcoming AGM. The Board has determined that all Directors standing for election or re-election at the AGM continue to be eective, hold recent and relevant experience, and continue to demonstrate commitment to the role. Biographical details of each Director standing for election or re-election will be set out in the Notice of AGM. John Walden Nomination Committee Chair 14 June 2023 89Motorpoint Group PLC | Annual Report and Accounts 2023 ## ESG COMMITTEE REPORT ## ESG Committee ## Chair’s statement DEAR SHAREHOLDER COMMITTEE GOVERNANCE | I am pleased to present the | During its inaugural year, the | | --- | --- | | report of the ESG Committee (the | ESG Committee met twice, | | ‘Committee’) for FY23. The principal | where it focused on reviewing | Committee membership purpose of this report is to look and monitoring the Group’s and attendance back over the inancial year ended new sustainability and diversity During the year the 31 March 2023 and describe the objectives and considered its Committee comprised: Committee’s responsibilities and eectiveness and areas for • Adele Cooper (Chair) | | activities during the year. | development following the external | | --- | --- | --- | | • Keith Mansield | | Board evaluation. Our measurement | | • Mary McNamara | The Committee, which irst | of our performance in relation | | • Mark Carpenter (CEO) | met in June 2022, oversees the | to ESG goals has signiicantly | | • Chris Morgan (CFO) | development and implementation | improved over the last year and | | | of the Group’s ESG strategy and | promising initial progress has been | | The Committee met twice | monitors its performance in relation | made. Further development is | | during the year and attendance | to ESG matters. | expected as the strategy continues | | is set out in the table on | | to be rolled out across the business. | page81. Committee composition and membership The Committee currently comprises three independent Non-Executive Directors, the CEO and CFO. Only members of the Committee are entitled to attend the meetings. Key sta, such as the Head of “ Promising initial Internal Audit and Risk, and Head of progress has been People, may be invited to attend for made by the Company all or parts of any meeting, as and in relation to ESG, and when appropriate. further development is expected as the strategy continues to be rolled out across the business.” Adele Cooper ESG Committee Chair 90 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements | Role of the Committee | • Make proposals to the | | | --- | --- | --- | | The role and responsibilities of | | Remuneration Committee | | the Committee are set out in its | | regarding appropriate ESG | | terms of reference, which were | | related performance objectives | | updated in January 2023 to more | | for Executive Directors. Provide | | clearly clarify responsibilities and | | an assessment as to the | | are available on the Company’s | | outcomes of the ESG related | | website motorpointplc.com. The key | | performance objectives as at the | | objectives of the Committee are to: | | end of the reporting period | • Assist the Board in overseeing the development and implementation I would like to thank my colleagues of the Group’s ESG strategy and in the Committee for their valued monitoring its performance in contributions, as well as extending relation to ESG matters my thanks to our colleagues • Oversee and support stakeholder within the business who have engagement on ESG matters enthusiastically embraced the including, but not limited to, Group’s vision and aims in relation understanding stakeholder to ESG. reporting expectations • Review, prior to approval by Adele Cooper the Board, the ESG matters to ESG Committee Chair be presented in the Company’s 14 June 2023 annual report and monitor the integrity of these reports • Oversee and monitor the Group’s progress against any net zero, decarbonisation or other environmental, social or governance strategies 91Motorpoint Group PLC | Annual Report and Accounts 2023 ## REMUNERATION COMMITTEE REPORT ## Remuneration Committee ## Chair’s statement DEAR SHAREHOLDER COMMITTEE GOVERNANCE I am pleased to present the Proposed new Remuneration Company’s Directors’ Remuneration Policy Report for the inancial year ended Committee membership The Remuneration Committee is 31 March 2023. This report is split and attendance responsible for setting and applying into two sections: During the year the a remuneration policy which serves • the Directors' Remuneration Committee comprised: to provide appropriate levels Policy, which describes the new • Mary McNamara (Chair) of remuneration to the Senior remuneration policy for the next Management Team. The goals of the • Adele Cooper three years and which will be policy are to provide appropriate • Keith Mansield subject to a binding shareholder reward for strong performance and vote at the 2023 AGM; and quality leadership, to ensure the The Committee met ive times • the Annual Report on retention of key employees and to during the year and attendance Remuneration, which includes allow the Company to attract high is set out in the table on the Chair's statement and quality candidates. page81. sets out in detail how the remuneration policy has been The Committee values the views applied in the year to 31 March of the Company’s shareholders 2023, as well as how the new and considered guidance from policy will be applied in the shareholder representative groups forthcoming year. This section of in reviewing and determining the the report will be subject to an new policy, alongside the business advisory shareholder vote at the strategy and market practice. As part 2023AGM. of the consultation with respect to the proposed new remuneration policy, the Chair of the Committee reached “ The business out to seek the views of our largest encountered a number shareholders on certain aspects of the policy including pension of well documented provision, annual bonus (opportunity macroeconomic and structure) and the level of headwinds during restricted share awards. Following | FY23, which resulted | the consultation and consideration | | --- | --- | | in stretching inancial | of the feedback received, it was | | targets not being met. | decided that there should be no | change to the policy for annual However progress bonus or restricted share awards and has been made on so there is only one change to the non-inancial targets, policy, which is to reduce the CEO’s in particular the market pension contribution from 10% to share element has been 3% of salary, to be aligned with that of the workforce. We are aware that achieved, which is a the CEO’s salary and total package key component of in particular still lags the market and our strategy.” will keep the packages for Executive Directors under review during this Mary McNamara policy period. Remuneration Committee Chair 92 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements | The new Directors’ Remuneration | The table below provides a summary of total remuneration for the Executive | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Policy can be found on page 94. | Directors for FY23. | | | | | | | | | | | Salary | Beneits | Pension | Bonus | | RSA | Total | | Performance for FY23 and | | (£’000) | (£’000) | (£’000) | (£’000) | (£’000) | | (£’000) | | remuneration outcomes | Mark Carpenter 360 2 36 140 270 808 | | | | | | | | | The business encountered a | Chris Morgan 263 2 8 102 197 572 | | | | | | | | number of well documented macroeconomic headwinds during | FY23, which included higher interest | We are proud to be a Real Living | in the share price and considered | | --- | --- | --- | | rates and inlation, consumer | Wage ('RLW') employer and this | whether a scale back of award | | uncertainty which reduced demand, | year, to provide additional support | level would be appropriate. | | supply chain challenges, a falling | to our lowest employees, we have | However, the Committee noted | | used vehicle market and lower gross | brought forward the increase to the | that Executive Directors have | | margins due to Electric Vehicle value | RLW from the recommended date | shared the downside experience | | falls and lower inance commissions. | of 1April 2023 to 1 January 2023. | alongside shareholders through the | | These have culminated in our | Bonuses have been payable widely | lower value of shareholdings and | | inancial targets not being met for | across the workforce. | historic Restricted Share Awards. | | the FY23 annual bonus. | | The Committee therefore considers | | | Application of the policy | maintaining the award level will | | However, some of the non-inancial | forFY24 | allow the Executive Directors to | | elements of the bonus plan have | | be appropriately incentivised to | Salary increases for both Executive delivered performance above deliver long term shareholder value and Non-executive Directors will threshold targets and in particular through the successful execution of be 3%, with the wider workforce the market share element has been the strategy. A robust performance receiving an increase of 5% of salary. achieved, which is a key component underpin will apply, and for FY24 of our strategy. Overall, a bonus awards an element of the inancial The Chief Executive’s pension payout of 38.8% of maximum has underpin will be based on long term contribution will reduce from 10% of been achieved. Whilst maintaining ESG performance. salary to 3% of salary, eective from a focus on short term inancial the date of the 2023 AGM when performance is important and We believe that Motorpoint’s the new remuneration policy takes we are disappointed to miss the approach to remuneration is eect. This will ensure that both the stretching targets that were set, appropriate, taking into account CEO and CFO pension contributions nonetheless it is appropriate to workforce remuneration outcomes are aligned to the rate payable to reward strong progress against the and the wider stakeholder the majority of the workforce. business strategy progress and the experience. The Committee Committee is comfortable with this therefore concluded it would not The annual bonus opportunity will level of bonus payout. be necessary to exercise discretion remain at 100% of salary and is to adjust any of the FY23 incentive based on performance measures The Restricted Shares Award outcomes. The Committee is aligned to the business strategy. granted to the CEO and other satisied that the remuneration Whilst we still believe that there senior management in August policy operated as intended for FY23 should be a signiicant element 2020 will vest in August 2023. This and that no substantial changes are based on non-inancial strategic grant predated the CFO joining required for FY24 to the policy and measures, we have determined the business. We are satisied that its operation. that the weighting on inancial the performance underpin has measures should be increased for been achieved over the three year On behalf of all of my colleagues FY24. Measures and their weightings performance period to 31 March on the Committee, I hope that you for FY24 are as follows: PBT (25%), 2023. In particular, management will support the resolution on the market share growth (25%), sales has made signiicant strategic new Directors' Remuneration Policy attributed to digital leads (20%) progress in challenging market and approve the annual report on customer satisfaction (10%), conditions and has grown market Remuneration at this year’s AGM. employee engagement (10%), and share substantially. Executives have in addition, we have introduced also been aligned to the shareholder an environmental metric based experience over the vesting period, Mary McNamara on the reduction of Scope 1 & 2 with lower values on vesting as Remuneration Committee Chair emissions(10%). a result of the fall in share price. 14 June 2023 Therefore the Committee has Restricted Share Awards will be determined that the award should made over shares equivalent to fully vest and, for the CEO, 50% will 75% of salary for both Executive vest in August 2023, 25% will vest Directors. The Committee in August 2024 and 25% will vest recognises the recent weakness August 2025. 93Motorpoint Group PLC | Annual Report and Accounts 2023 ## REMUNERATION POLICY | This section of the report details the | Transparency Rules. The sections | remuneration policy is to provide | | --- | --- | --- | | Remuneration Policy for Executive | of the Remuneration Report that | an appropriate pay structure | | Directors. The policy set out below | are subject to audit are marked as | for the Executive Directors and | | will, subject to shareholder approval, | Audited Information. The remaining | senior management, to ensure | | become eective from the 2023 | sections of the Remuneration Report | their retention and to continue to | | AGM on 26 July 2023 and will apply | are not subject to audit. | focus them on delivering strong | | for up to three years from this date. | | inancial performance. To manage | | | Decision making process for | any potential conlicts of interest, | | Compliance statement | the determination, review and | the Committee ensures that no | individual is involved in discussions This report has been prepared in implementation of the policy regarding their own remuneration accordance with the provisions The Committee sets the arrangements. of the Companies Act 2006 and remuneration policy for Executive Schedule 8 of the Large and Directors and other Senior The implementation of the policy Medium sized Companies and Executives taking into account the is considered each year by the Groups (Accounts and Reports) Company’s strategic objectives, Committee in light of the strategic (Amendment) Regulations 2013 shareholder expectations, the priorities and the wider stakeholder (Regulations) and the subsequent principles of the UK Corporate experience whilst incentive targets amendments in 2018 and 2019. It Governance Code and the are reviewed to check if they also meets the requirements of remuneration policy for the remain appropriate or need to the UK Listing Authority’s Listing wider workforce. The aim of the berecalibrated. Rules and the Disclosure and The Committee addresses the following factors when determining the remuneration policy and its implementation, as recommend by the UK Corporate Governance Code: Action Progress during FY23 Clarity – remuneration arrangements should • The metrics used in our annual bonus have a direct link to our Company KPIs to be transparent and promote eective ensure performance related remuneration supports and drives our strategy engagement with shareholders and • Restricted Shares ensure senior management are focused on the long term the workforce. sustainability and interests of the Company and all of its stakeholders • The Remuneration Committee consults with shareholders to explain and clearly set out any proposed changes to the policy and is committed to having an open and constructive dialogue with shareholders Simplicity – remuneration structures should • Our remuneration structure which consists of annual bonus and Restricted avoid complexity and their rationale and Shares, which are not subject to performance measures, is simple and easy to operation should be easy to understand. understand • The bonus is payable in cash. The Restricted Shares are the sole share based plan Risk – remuneration arrangements should • The Committee has ensured that risks are identiied and mitigated by the ensure reputational and other risks from presence of: excessive rewards, and behavioural risks that – discretion to override the formulaic outturn of incentives can arise from target based incentive plans, – clawback and malus provisions are identiied and mitigated. • Restricted Shares ensure Executives are not encouraged to make short term decisions but to deliver sustainable shareholder returns over the long term • Executives are encouraged to build signiicant shareholdings Predictability – the range of possible values of • The scenario charts on page 99 set out the potential rewards available to the rewards to individual Directors and any other Executive Directors under three dierent performance scenarios, and in the limits or discretions should be identiied and case of a 50% share price increase in relation to the restricted shares explained at the time of approving the policy. Proportionality – the link between individual • Variable pay comprises the majority of the Executive Directors’ packages, with awards, the delivery of strategy and the long the individual limits and pay-out for dierent levels of performance set out in term performance of the Company should the policy and the scenario charts on page 99. The performance conditions be clear. Outcomes should not reward used for the annual bonus are aligned to strategy and the targets are set to be poorperformance. stretching to reward for delivering above market returns in line with strategy • The Committee retains discretion to override the formulaic outturns of incentives if the payout does not relect broader Company performance and other factors 94 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Action Progress during FY23 Alignment to culture – incentive schemes • The alignment of metrics to the medium and long term strategy ensures should drive behaviours consistent with behaviours consistent with the Company’s purpose and values are being Company purpose, values and strategy. encouraged • The presence of clawback and malus provisions discourages behaviours that are not consistent with the Company’s purpose, values and strategy • The Committee reviews the wider workforce pay and policies to ensure there is alignment with the Executive Director policy and that remuneration is designed to support the Company’s people centric culture Changes to the Directors’ Remuneration Policy Following a detailed review of the remuneration policy and shareholder engagement, there is only one change proposed to the policy. The pension policy has been updated to relect that Executive Directors may receive a pension contribution in line with the contribution available to the wider workforce (currently 3% of salary). The CEO’s pension will be aligned to this rate following the 2023 AGM, the date the new policy applies. Directors’ Remuneration Policy A breakdown of all elements of the Executive Remuneration Policy and an explanation of how they operate can be found in the table below: Purpose and link to strategy Operation Performance measurement Maximum opportunity BASE SALARY | To aid the | Base salaries will normally be reviewed | Base salary levels are | While there is no maximum | | --- | --- | --- | --- | | recruitment of | annually by the Committee with any increases | set at a level to relect | salary, increases will | | Executive Directors | typically taking eect from 1 April each year. | the experience, skills | normally be in line | | of a suitable calibre | | and responsibilities of | with the typical level of | | for the role and to | | the individual as well as | increase awarded to other | | provide a core level | | the scope and scale of | employees of the Group. | | of reward to relect | | theirrole. | | The Committee may award the duties required. Increases to base salary increases above this level will take into account to ensure that the salaries the performance of the appropriately relect the individual and Company role, responsibilities, and external indicators performance and such as inlation. experience of the Directors. BENEFITS To provide a market The beneits oered to Executive Directors Not applicable. There is no maximum competitive beneits comprise, but are not limited to, family limit on the value of the package for the medical insurance and company car. beneits provided but executives to aid the Committee monitors The Committee may oer an equivalent cash recruitment and the total cost of the allowance instead if it feels it is more suitable. retention. beneit provision on a Other reasonable beneits may be oered regular basis. as appropriate (including, in exceptional circumstances, relocation and/or disturbance allowances). Executive Directors may also be reimbursed for any reasonable expenses incurred in performing their duties, and any income tax payable thereon. 95Motorpoint Group PLC | Annual Report and Accounts 2023 ## REMUNERATION POLICY CONTINUED Purpose and link to strategy Operation Performance measurement Maximum opportunity PENSION | To provide market | Executive Directors are eligible for a | Not applicable. A pension contribution is | | | --- | --- | --- | --- | | competitive pension | contribution to the Group personal pension | | payable in line with the | | arrangements for the | plan, or any other nominated personal | | pension available to the | | executives and to | pension fund. | | majority of the workforce, | | aid recruitment and | | | currently 3% of salary. | Where appropriate, Executive Directors retention. | may instead receive a cash allowance in | The pension for the CEO | | --- | --- | | lieu of formal pension contributions, or a | will reduce from 10% of | | combination of both. | salary to 3% of salary from | the 2023 AGM. ANNUAL BONUS | To encourage | Bonus payments are subject to the | Performance will normally | 100% of salary. | | --- | --- | --- | --- | | improved inancial | achievement of performance targets normally | be based on a mix of | | | and operational | set over one inancial year. | inancial, operational and / | | | performance and | | or non-inancial measures | | Annual bonuses are payable at the sole align the interests aligned to the strategic discretion of the Committee. The Committee of Directors with the objectives of the business. has discretion to adjust the formula driven short term Company outturn of the annual bonus calculation. Financial performance will strategy. usually be represented All bonus payments are payable in cash by PBT targets, although and subject to appropriate recovery and the Committee reserves withholding arrangements. the right to include other measures in support of the Company strategy as it sees it. Stretching performance targets will be determined taking into account internal and external forecasts. For threshold performance up to 30% of maximum is payable. LONG TERM INCENTIVES  RESTRICTED SHARES | To encourage | Awards will normally be granted following | In order for Restricted | Normally 75% of | | --- | --- | --- | --- | | improved inancial | the publication of the Company’s annual | Shares to vest, the | salary. However, an | | and operational | results each year. | Remuneration Committee | individual maximum | | performance and | | must be satisied that | of 100% of salary may | Restricted Shares may normally vest no align the interests business performance is apply in exceptional sooner than 50%, 25% and 25% over three, of Directors with robust and sustainable circumstances. four and ive years from grant, subject to the long term and that management service, and subject to an underpinning Company strategy has strengthened the inancial performance condition. and the interests of business. In assessing this shareholders through Awards are additionally subject to a post performance condition, share ownership. vesting holding period during which time the Committee will vested shares may not be sold (other than for consider inancial and non- tax) before ive years from grant. inancial KPIs, including ESG targets, as well as This holding period will continue post delivery against strategic cessation of employment (to the extent that priorities. To the extent awards do not lapse). it is not satisied that this performance condition is The Committee may determine that dividend met, the Committee may equivalents will accrue over the vesting/ scale back the level of holding period. vested awards including Vesting of awards is at the sole discretion to zero. This performance of the Committee and the Committee may assessment will take place reduce the level of the award after grant and at the end of the third year. at vesting, if it considers that it is appropriate to do so. Restricted Shares are subject to recovery and withholding arrangements. 96 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Purpose and link to strategy Operation Performance measurement Maximum opportunity ALL EMPLOYEE SHARE PLANS To align the interests The Company has adopted employee share Not applicable. In line with statutory of Directors and plans in which the Executive Directors are limits. other employees eligible to participate on the same terms as with those of the all other employees. shareholders through share ownership. SHAREHOLDING GUIDELINES | To align the interests | All Executive Directors are required to build | Not applicable. Not applicable. | | --- | --- | --- | | of Directors with | and maintain a shareholding equivalent in | | | those of the | value to 200% of their annual base salary. | | shareholders through Until this guideline is met, Directors must share ownership. retain half of any Restricted Shares that vest (after payment of tax and national insurance contributions) together with any shares deferred as part of the bonus (if applicable). Post cessation of employment, Executives will be required to retain the lower of the shareholding requirement (200% of salary) or the actual shares they hold on cessation of employment for a period of two years. Any voluntary purchases of shares by the Executives from the start of the previous policy period will be excluded from this requirement. The Committee has discretion to amend the requirement in certain circumstances as it considers appropriate. Choice of performance measures The Committee retains lexibility as to the choice of performance measures for future annual bonus awards. Measures will be selected as appropriate to relect the business strategy and to ensure the delivery of sound inancial performance. The current performance measures are disclosed in the annual report on remuneration, together with the link to the business strategy. The Committee sets appropriate and stretching targets for the annual bonus in the context of the Company’s business plan, trading environment and strategic plan. Incentive plan operation The Committee will operate the Company’s incentive plans according to their respective rules and consistent with normal market practice, the Listing Rules and HMRC rules where relevant, including lexibility in a number of regards. This includes timing of awards, dealing with leavers and making adjustments to awards following acquisitions, disposals, changes in share capital and other merger and acquisition activity. The Committee also retains the ability to adjust the targets and / or set dierent measures for the annual bonus plan if events occur which cause it to determine that the conditions are no longer appropriate and the amendment is required so that the conditions achieve their original purpose and are not materially less diicult to satisfy. The Committee may adjust the formula driven outturn of the annual bonus calculation in the event it considers that the outturn does not relect underlying performance, overall shareholder experience or employee reward outcome. Recovery and withholding provisions may be operated at the discretion of the Committee in respect of awards granted under the annual bonus plan and Restricted Shares in certain circumstances (including where there is a material misstatement or restatement of audited accounts, an error in assessing any applicable performance condition or bonus outcome, or in the event of gross misconduct on the part of the participant, corporate failure, failure of risk management or reputational damage). Any use of the above discretions would, where relevant, be explained in the annual report on remuneration. 97Motorpoint Group PLC | Annual Report and Accounts 2023 ## REMUNERATION POLICY CONTINUED Remuneration Policy for Non-Executive Directors The table below sets out how pay is structured for the Non-Executive Directors ('NEDs'). Purpose and link to strategy Operation Performance measurement Maximum opportunity FEES To ensure a fair NEDs receive a ixed base fee in cash or shares Not applicable. Current fee levels are set reward for services for their role on the Board, plus supplementary out in the annual report provided to the fees for additional responsibilities such as on remuneration. Company. performing the role of SID, or chairing one of Aggregate fee levels are the Board Committees. subject to the maximum The Non-Executive Chair receives a ixed fee limit set out in the Articles only, and is not eligible for any additional of Association. responsibility fees. Fee levels are reviewed normally on an annual basis, and may be increased taking into account factors such as the time commitment and complexity of the role and market levels in companies of comparable size and complexity and other broadly comparable companies. Each NED will be entitled to be reimbursed for all reasonable expenses incurred by them in the course of their duties to the Company (plus amounts in respect of any tax payable), and has the beneit of indemnity insurance maintained by the Group on their behalf indemnifying them against liabilities they may potentially incur to third parties as a result of his / her oice as Director. Where there has been a material increase in time commitment in the year, fees may be temporarily increased to relect this. SHARE OWNERSHIP GUIDELINES | To align the interests | All NEDs are encouraged to build and | Not applicable. Not applicable. | | --- | --- | --- | | of Directors with | maintain a shareholding equivalent in value to | | | those of shareholders | 100% of their annual fees. | | through share ownership. Reward scenarios The bar charts in this section detail how the composition of the Executive Directors’ remuneration package varies at dierent levels of performance. • Threshold includes ixed pay only (i.e. base salary, beneits and pension reducing to 3% of salary from the 2023 AGM for the CEO) • On target includes ixed pay, 60% of maximum bonus and full vesting of Restricted Shares • Maximum includes ixed pay, maximum bonus payout and full vesting of Restricted Shares • Maximum plus the impact of 50% share price appreciation on Restricted Shares Salary levels are eective as at 1 April 2023, and the value for beneits is the cost of providing those beneits in FY23. 98 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements No share price growth has been factored into the chart, except where indicated, and all amounts have been rounded to the nearest £1,000. £1,400,000 £1,199,000 £1,200,000 £1,013,000 £1,000,000 35% £894,000 £856,000 27% £800,000 £754,000 31% £646,000 35% 27% £600,000 31% 36% 31% 25% £393,000 | £400,000 | | | | | | 36% | 32% | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | £281,000 | 26% | | | | £200,000 | 100% 44% | 37% | 34% | 100% | 43% | 37% | | 33% £0,000 | Threshold ThresholdOn target On targetMaximum MaximumMaximum | | | | | | Maximum | | --- | --- | --- | --- | --- | --- | --- | | | | | with 50% | | | with 50% | | | | | share price | | | share price | | | | | appreciation | | | appreciation | | | Chief Executive Oicer | | | Chief Financial Oicer | | | | | | (Mark Carpenter) | | | (Chris Morgan) | | Fixed Pay Annual Bonus Restricted Shares Approach to recruitment remuneration In determining the remuneration package for a new Executive Director, the Committee takes into account the skills and experience of the individual, the market rate for a candidate of that experience and the importance of securing the individual. New Executive Director hires (including those promoted internally) will be oered packages in line with the policy in place at the time, except as noted below: • If it is considered appropriate to set the salary for a new Executive Director at a level which is below market, his or her salary may be increased in future periods to achieve the desired market positioning by way of a series of phased above inlation increases, subject to his or her continued development in the role. • Any bonus payment for the year of joining will normally be prorated to relect the proportion of the period worked, and the Committee may set dierent performance measures and targets, depending on the timing and nature of the appointment. • The ongoing annual bonus and restricted shares opportunities will be in line with the limits set out in the policytable. • The Committee recognises that it may be necessary in some circumstances to provide compensation for amounts forfeited from a previous employer (‘buy out awards’). Any buy out awards would be limited to the value of remuneration forfeited when leaving the former employer and would be structured so as to be, to the extent possible, no more generous in terms of the key terms (e.g. delivery mechanism, time to vesting, expected value and performance conditions) than the incentive it is replacing. Where possible any such payments would be facilitated through the Company’s existing incentive plans, but, if not, the awards may be granted outside of these plans, as permitted under the Listing Rules, which allow for the grant of awards to facilitate the recruitment of an ExecutiveDirector. • In the case of an internal appointment, any variable pay element awarded in respect of the prior role will be allowed to continue according to its original terms or adjusted as considered appropriate to relect the new role. 99Motorpoint Group PLC | Annual Report and Accounts 2023 REMUNERATION POLICY CONTINUED # **External directorships** Executive Directors are permitted to take on external non-executive directorships at other listed companies, though normally only one other appointment, to bring a further external perspective to the Group and help in the development of key individuals' experience. In order to avoid any conflicts of interest, all appointments are subject to the approval of the Nomination Committee. Executive Directors are permitted to retain the fees arising from any appointments undertaken. # **Service contracts and payments for loss of office** The terms of Directors' service contracts and letters of appointments are available for inspection at the Company's registered office. | Director | Date of contract / letter | Date of expiry | Notice period by Company or Director | | --- | --- | --- | --- | | **Executive Directors** | | | | | Mark Carpenter | 12 May 2016 | N/A | 9 months | | Chris Morgan | 11 January 2021 | N/A | 9 months | | **Non-Executive Directors** | | | | | John Walden | 10 January 2022 | 10 January 2025 | 3 months | | Mary McNamara | 14 May 2019 | 14 May 2025 | 3 months | | Adele Cooper | 6 March 2020 | 6 March 2026 | 3 months | | Keith Mansfield | 20 May 2020 | 20 May 2026 | 3 months | The remuneration related elements of the current contracts for Executive Directors are as follows: | Provision | Treatment | | --- | --- | | **Termination payment** | The Company may (at its discretion) elect to terminate the employment by making a payment in lieu of notice equivalent in value to the base salary which the Executive Director would have received during any unexpired period of notice. | | **Mitigation** | The payment in lieu of notice will be payable in monthly instalments (subject to mitigation, i.e. reduced on a pound for pound basis if alternative employment / engagement is taken up during the payment period). | | **Annual bonus** | There is no contractual right to any bonus payment in the event of termination although in certain circumstances the Committee may exercise its discretion to pay a bonus at the normal time for the period of active service and based on performance assessed after the end of the financial year. The holding period in respect of deferred shares, if applicable, will normally be retained. | | **Share awards** | The default treatment for Restricted Shares under the Performance Share Plan rules is for all unvested awards to lapse in full on cessation. However, if the participant ceases to be an employee or a Director within the Group because of his / her death, injury, disability, retirement, redundancy, their employing company or the business for which they work being sold out of the Group or in other circumstances at the discretion of the Committee, then his / her award will normally vest on the original scheduled vesting date (except in the case of death, where the default position will be for the award to vest on cessation of employment). The default position in this case is that an award will vest subject to: (i) the assessment of the performance underpin over the measurement period; and (ii) the prorating of the award by reference to the period of time served in employment during the normal vesting period. However, the Committee can decide to allow early vesting and / or reduce or eliminate the prorating of an award if it regards it as appropriate to do so in the particular circumstances. | | **Other** | Outstanding shares or awards under an all employee share plan will vest in accordance with the terms of the plan and HMRC legislation. The Committee may pay any statutory entitlements or settle or compromise claims in connection with a termination of employment, where considered in the best interest of the Company. Outplacement services and reimbursement of legal costs may also be provided. | 100 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Legacy arrangements In approving this Directors’ Remuneration Policy, authority is given to the Company to honour any commitments entered into with current or former Directors that have been disclosed to and approved by shareholders in previous remuneration reports. Details of any payments to former Directors will be set out in the annual report on remuneration as they arise. Consideration of pay conditions within the wider team When making decisions on executive remuneration, the Committee takes into account pay conditions for the Company as a whole, although it has not, to date, consulted directly with employees on this subject. The Committee will review its approach to engaging with employees on remuneration matters and in particular to explain how the pay for senior executives aligns to the pay practices for the workforce generally. The Group has a strong ‘team culture‘ and accordingly there is consistency in how packages are structured across the whole Senior Management team, with all Executive Directors and Senior Managers participating in the same annual incentive plan. However, there are some dierences in the structure of the remuneration policy for the Executive Directors compared with other Senior Managers, which the Committee believes are necessary to relect the dierent levels of responsibility. The two main dierences are the increased emphasis on variable pay for Executive Directors and a greater focus on long term alignment (through additional holding periods for the long term incentive awards and minimum shareholding guidelines). Within the wider group, all employees receive salary, beneits and pension and are eligible to receive an annual bonus. Periodic reviews against market data are undertaken to ensure an appropriate cascade of remuneration throughout the Group. We are proud to be a Real Living Wage employer and this year, to provide additional support to our lower employees, we have brought forward the increase to the RLW from the recommended date of 1 April 2023 to 1 January 2023. Shareholder Views The Committee values the views of the Company’s shareholders and takes into account guidance from shareholder representative bodies. As part of the Remuneration Policy review, the Committee engaged with the largest shareholders and the proxy advisory bodies to understand their views on the proposed policy. Further details of this engagement are set out in the Annual Statement. Shareholder feedback received in relation to the AGM, as well as any additional feedback received during the year, isconsidered as part of the Company’s annual review. 101Motorpoint Group PLC | Annual Report and Accounts 2023 ## ANNUAL REPORT ON REMUNERATION This part of the report has been prepared in accordance with Part 4 of The Large and Medium sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (as amended in 2018 and 2019) which amended The Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008, and 9.8.6R of the Listing Rules. The annual report on remuneration, including the Chair's annual statement, will be put to an advisory shareholder vote at our 2023 AGM. Committee membership and attendance During the year the Committee comprised: Mary McNamara (Chair) Adele Cooper Keith Mansield The Chair and CEO attend meetings by invitation but are not members of the Committee. The Committee met ive times during the year and attendance is set out in the table on page 81. Advice to the Committee The Committee receives information and takes advice from inside and outside the Group. Internal support is provided by the Company Secretary. The CEO and any other Director or employee may be invited to attend Committee meetings by the Chair where relevant. No individual is present when matters relating to his or her own remuneration are discussed. Following a formal review by the Committee during 2020, Korn Ferry was appointed as adviser to the Committee. Korn Ferry is a signatory to the Remuneration Consultants’ Code of Conduct and has conirmed to the Committee that it adheres in all respects to the terms of the Code. Fees paid to Korn Ferry during the year were £38,108 (ex VAT), which relected the applicable hourly rates agreed with Korn Ferry. The Committee is satisied, following a discussion involving all the members of the Committee, that the advice it received is objective and independent. Korn Ferry did not provide any other services to the Company during the year. Remuneration in FY23 Directors’ single igure of remuneration (audited) The table below shows the aggregate emoluments earned by the Directors of the Company during FY23 and also sets out the comparative information for FY22. | | | | | | | | Total ixed | | | | | Total variable | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Salary/fees | | Beneits | 1 | Pension | remuneration | | 3 | RSA | 2 | Bonus | remuneration | | Total | | Period | | (£’000) | (£’000) | | (£’000) | | (£’000) | | (£’000) | | (£’000) | | (£’000) | (£’000) | FY23 360 2 36 398 270 140 410 808 Mark Carpenter FY22 350 2 35 387 262 329 591 978 FY23 263 2 8 273 197 102 299 572 Chris Morgan FY22 255 2 8 265 191 240 431 696 FY23 200 0 0 200 0 0 0 200 John Walden 4 FY22 144 0 0 144 0 0 0 144 FY23 58 0 0 58 0 0 0 58 Mary McNamara FY22 53 0 0 53 0 0 0 53 FY23 49 0 0 49 0 0 0 49 Adele Cooper FY22 40 0 0 40 0 0 0 40 FY23 52 0 0 52 0 0 0 52 Keith Mansield FY22 47 0 0 47 0 0 0 47 1. Relates to provision of family private medical insurance. 2. The face value on grant of the RSA awards is shown in the table above as there are no performance conditions other than underpins tested on vesting. 3. This also includes the value of the discount oered in relation to the SAYE options granted during the year, which was worth £400. 4. From John Walden’s appointment on 10 January 2022, and includes a one-o fee of £100,000, the net amount of which has invested in Company shares. 102 Motorpoint Group PLC | Annual Report and Accounts 2023 Strategic Report Governance Financial Statements Details of variable pay earned in the year (audited) Annual bonus Executive Directors were eligible for a maximum annual bonus payment of 100% of salary, subject to PBT, market share growth, customer and employment engagement measures, along with selected strategic objectives. The table below sets out the performance conditions and targets that were set in relation to FY23 and the performance achieved. Payout of element (%of Performance element Weighting Performance required achieved weighting) Performance measure Threshold Targert Stretch PBT 15% £20.5m £21.5m £23.65m £(0.3)m 0% Growth in share of the market weoperate in 20% +ve +0.2% +0.5% +0.44% 17.5% Customer – NPS 17.5% 80 82 84 83.5 15.6% STRATEGIC OBJECTIVES: Cars sold per FTE 15% 74.7 76.7 78.7 71.0 0% Sell your car 15% Budget Budget +10% Budget +20%