9:14 am, November 7, 2022
Eastern Western Motor Group saw its pre-tax profit more than double to £32m last year.
The privately owned dealer group said in its newly published accounts for the year ended December 31, 2021 and filed as Eastern Holdings Ltd that demand in the second quarter had been ‘very strong, introducing a large degree of scepticism into the argument customers are desperate for digital-only retailing experiences’.
Its pre-tax profit went up from £15.83m in 2020 to £32.031m last year, while turnover at the Car Dealer Top 100 firm rose by 23 per cent from £664.719m to £818.08m.
Eastern Western sells new and used cars across Scotland and represents Mercedes-Benz, Maxus, BMW, Lexus, Honda, Mazda, Mini, Smart, Toyota, Nissan, Volkswagen, Harley-Davidson and Kawasaki.
During the year, it bought Alex F Noble & Son for some £2.5m, which it called a ‘strategic purchase’ that gave ‘further depth and scale to our existing Nissan businesses’.
It also highlighted the fact that it enhanced staff holiday provision and improved benefits to ensure it gave ‘the best work/life/income balance in the industry’.
Eastern Holdings claimed £1.088m under the furlough scheme during the year, versus £7.216m in 2020. Its average number of employees dropped from 1,542 to 1,453.
Company secretary Nasser Mohammed said in the accompanying report: ‘Customer behaviour post-restrictions suggested customers were delighted to be able to “shop normally” again, using digital tools to enhance a physical experience rather than completely replace it.
‘This may help to explain why traditional “bricks & clicks” retailers have fared well at a time when digital disruptors have often struggled.’
But he added: ‘Although demand has normalised, supply has not. Order banks remain very high with lengthy lead times and highly volatile and unpredictable supply.
‘The return to more normal demand for new cars but still abnormally poor supply is likely to keep discounting very low, margins relatively high and used car demand strong.
‘In turn, we expect used car prices to remain high for the foreseeable future and at least until the new car order banks reduce and production catches up with historic and current demand.
‘Major areas of risk are post-Brexit, with the associated barriers to trade, inflation and interest rate rises, Covid-19 staff and consumer challenges and now the vehicle parts shortage, which has impacted supply in 2021 and this continues in 2022.’
Like-for-like new car sales rose by 9.6 per cent and its used car sales went up by 19 per cent.
Mohammed said: ‘Overall, the directors are very satisfied with the group’s performance for 2021. We are particularly pleased with this result considering in 2021 the general UK market registrations increased by one per cent and the Scottish market decreased by 0.4 per cent.’
Pictured via Google Street View is the Eastern BMW dealership in Edinburgh
