7:35 am, April 24, 2023
Family-owned franchise car dealer Swansway Group – which represents Audi, VW and Jaguar Land Rover – clocked up profits of £22.3m last year.
In accounts shared with Car Dealer, the group reported turnover had decreased slightly last year compared to 2021, falling from £838m to £819m in 2022.
Profit before tax dropped from the ‘all-time record’ 2021 result of £25.2m to £22.3m.
Swansway said that ‘despite the cost of living crisis’ the group still saw ‘high levels of consumer demand’ which resulted in ‘strong trading’.
The group’s EBITDA profit figure – used to rank our most profitable Car Dealer Top 100 – was £29m. Last year, the group was the 16th most profitable in the UK.
Swansway said it also increased shareholder funds by £11m to £66.4m in 2022 while borrowings were reduced during the year by £3m.
Directors approved a dividend to shareholders of £8.25m.
Director Peter Smyth said: ‘Although the profits declined against our all-time high of 2021, I believe that our results outperform many of our peers in the sector.’
The group has 20 franchised dealerships – including Audi, VW, VW Commercial, Seat, Honda, Peugeut, Land Rover and Jaguar – and six used car ‘Motor Match’ centres in the North West.
It also operates four VW Group trade parts sites and an accident repair centre. The trade parts sites recorded a 40 per cent increase in profitability during the year.
In its accounts, the group said the ‘majority’ of its franchises saw high levels of demands continue throughout 2022 with Audi, VW (both cars and vans) and Land Rover delivering ‘high levels of profitability’.
Honda was ‘disproportionately affected’ by a lack of new cars during the year, but this was mitigated by its used business, while the Seat dealership saw particular demand for the Ateca SUV.
Despite this, the overall number of new and used cars sold by Swansway fell – in 2021 the group retailed a total of 32,896 cars, and in 2022 this dropped to 28,846.
The group sold 6,926 new cars to retail customers, 7,303 to fleet buyers and 14,617 used cars in 2022.
During the year, the group also branched out into the contract hire business, launching Stable Vehicle Contracts.
Swansway explained: ‘The initial emphasis will be on the hiring of commercial vehicles and then subsequently moving on to passenger cars.
‘Supply agreements have been finalised with manufacturers and funding lines agreed with a panel of funders.
‘The strategic rationale being not just profitability on the contract hire agreement but generating a supply of good three to four year old used vehicles for the franchise and Motor Match used vehicle businesses.’
Listen: Peter Smyth on the Car Dealer Podcast
The dealer group also continued to invest in property, acquiring the freehold interest in its Blackburn Audi site for £4.74m.
And it said its website continued to be enhanced in 2022 with a freshly launched site that increased traffic by nine per cent and resulted in a 23 per cent rise in online enquiries.
Director Peter Smyth added: ‘Looking ahead to the remainder of 2023 and beyond, we have already seen an encouraging performance in Q1 of this year, with results exceeding the predicted expectations, especially when considered against the backdrop of the cost-of-living crisis, a rise in inflation and interest rates.
‘We have a strong financial footing, leaving us equipped to maximise opportunities and tackle challenges, whilst OEMs consolidate and reorganise during their planned agency model introductions.’
Swansway’s Peter Smyth will be one of our panellists at Car Dealer Live 2024. Tickets are for sale at early bird rates now on the Car Dealer Live website.
