7:30 am, August 7, 2025
Dealer group Gates performed ‘below expectations’ last year with bosses blaming ‘extreme difficulties’ for declining profits and turnover.
Accounts recently published via Companies House show that Frank G. Gates Limited made a pre-tax profit of £3.05m in the 12 months to the end of December 2024.
The result represented a decline of more than 7% on 2023’s figure, which stood at £3.3m, with turnover also sliding from £211.34m to £195.16m.
Bosses acknowledged that the Ford specialist’s performance throughout the year was ‘below our expectations’ but said that the board remained ‘satisfied’ amid a backdrop of external challenges.
Directors cited ‘international conflicts, worldwide financial uncertainty and a global energy crisis’ as major contributing factors, as well as high ‘interest rates, inflated cost pressures, and a cost-of-living crisis’.
The comments echo similar struggles seen throughout the motor trade in 2024, with profits mostly down across the board. Despite the difficulties, gross profit margins held firm at 13% for the Car Dealer Top 100 firm.
When it came to staff, bosses say the firm’s employees remain its ‘biggest asset’, with further increments in pay introduced throughout 2024.
Despite this, wages and salaries at the firm fell from £14.47m to £13.96m in the period covered by the accounts, with the size of the workforce remaining at largely the same level.
Meanwhile, directors remunerations fell significantly, dropping from £2.02m to £1.52m, with ordinary dividends of £2.23m throughout the year.
Reflecting on the period, director Heath Greenall said: ‘Against the ongoing backdrop of international conflict, worldwide financial uncertainty and a global energy crisis, the UK economy continued to experience high interest rate costs, inflated cost pressures, and a cost-of-living crisis.
‘Whilst the UK electorate voted a Labour Government into power during 2024, the UK automotive industry felt the severe disruption of the Government’s ZEV mandate on the new car market, uncertainty around supplementary finance income, subdued consumer confidence, and the arrival of Chinese brands into the market.
‘Despite these enduring difficulties and subsequent company performance being below our expectations, the board of directors are satisfied with the financial results of the company during the year.
‘This is largely drawn from comparisons with our counterparts across the national dealer networks.’
‘The year presented some extreme difficulties and although the overall financial performance for the year was disappointing, it was by no means poor.
‘Turnover fell by 8% to £195.2m from £211.3m in 2023, and with gross profit margins remaining at 13%, gross profit was reduced,’ he added.
‘Employees are the organisation’s most valuable asset, and in spite of continued cost pressures, the directors opted to introduce further increments in pay during the year, to assist with the burden of the cost-of-living crisis and inflated costs, and acknowledge their colleagues’ ongoing dedication and resilience that helped achieve another successful year.
‘A further general increase for 2025 has been deferred, as we explore measures to offset the substantial rises in employer’s NIC and minimum wage rates.
‘We continue to invest in our people and adopt flexible working arrangements to improve employee work-life balance.’
Ford strategy ‘severely affected new car sales volume’
Despite having recently taken on franchise agreements with BYD, Omoda and Jaecoo, Gates retains a strong link with Ford, which it has represented for several decades.
Gates Ford has been in existence for more than 100 years, starting life in 1920. Since then, it has grown to encompass multiple showrooms, FordStores and Transit Centres across Essex and Hertfordshire.
The latest results come at a challenging time for the Blue Oval, with the brand recently coming bottom of our Car Dealer Power manufacturer survey.
Gates says that throughout 2024, the manufacturer ‘adopted commercial strategies to prioritise the stimulation of BEV sales volume over ICE vehicles’.
Directors believe that, when combined with the brand’s ‘limited BEV model range and stock availability’, the approach resulted in a decline in new car sales.
Throughout the year, new car volumes fell by 30% year-on-year, with vehicle margins and profitability also down.
Despite this, the group continued to enjoy strong performance from its commercial vehicles division, which benefitted from ‘a much stronger and unhindered market’.
Greenall added: ‘Under regulatory pressure from the ZEV mandate and VETS targets, Ford Motor Company, like most manufacturers, adopted commercial strategies to prioritise the stimulation of BEV sales volume over ICE vehicles.
‘This, combined with a limited BEV model range and stock availability, product holds, and declining private retail demand, severely affected new car sales volume (dropping by 30% on 2023), vehicle margins and profitability.
‘New commercial sales, in a much stronger and unhindered market, performed well and increased volume by 9% and departmental profitability by 23% year on year.
‘Overall used sales volumes rose by 3%, but restricted vehicle supply, price volatility and enhanced preparation costs, reduced gross profit margins and our used sector profitability.’
Gates finished 62nd in our most recent list of the UK’s most profitable car dealers
