Small profit provides steady start to second half of year for retailers

10:24 am, September 3, 2019

JULY saw a minor improvement for retailers on average as they recorded a marginal profit against July 2018’s loss, according to ASE Global.

Mike Jones, chairman of the dealer profitability specialist, said: ‘Even though the entire profit swing was less than £2,000, this represents a steady start to the second half of the year, particularly given the uncertainty on the horizon. Given recent trends in registrations and profitability, any improvement is to be welcomed.

‘The profitability improvement was once again driven by the contribution from the used car department. Levels of stock remain high, however, which has seen the return on investment remain below 80 per cent for the past five months.’

Dealers made £147 on average in July, and Jones added: ‘With the impending RDE [Real Driving Emissions test] deadline hitting in September, we are monitoring closely to determine the level of retailer self-registration activity and overall used car stock levels.’

Although the outlook for the rest of the year was uncertain there was still cause for optimism, he said. ‘With the RDE deadline, Brexit plus a faltering economy, the industry is likely to have plenty of challenges in the second half of 2019.

‘However, we are expecting H2 to show a rosier picture in terms of both comparative profitability and registrations.’