8:37 am, October 16, 2023
New and used car dealer group Drive Motor Retail suffered a 12% pre-tax profit drop last year despite a small rise in turnover.
Its newly published accounts for the year ended December 31, 2022 show it made £5.645m versus £6.434m in 2021, while turnover went up by 2% from £273.305m to £279.777m.
Drive said in the accompanying report, signed on behalf of the board by company secretary Stuart Harrison, that the group’s performance had ‘a backdrop of economic uncertainty and supply constraints’ that had affected new and used car availability.
However, the directors added: ‘Despite the challenges and the adverse impact of soaring inflation, increased interest rates and the cost-of-living crisis, the group yet again demonstrated its resilience and ability to maintain strong returns.
‘The trading performance in 2022 demonstrates that the group’s proven operating practices and ability to adapt and evolve to meet industry challenges ensures continual performance at the highest levels for the benefit of our customers, colleagues, manufacturer partners and shareholders.’
They said they considered that the results had outperformed the market.
The Leicester-headquartered dealer group closed a satellite franchise operation in Northallerton during the year and now has 22 franchise dealerships in England stretching from the north-east to the south-west, representing Vauxhall, Hyundai, MG and Citroen.
The directors added: ‘The group are delighted with the performance of the MG franchise, newly added to the group in 2021. Sales volumes in 2022 increased year on year by 69.4% against a national average increase of 53.3%.’
However, used vehicle sales showed a like-for-like decrease of 10.3% year on year, which Drive said was in line with the wider industry.
It said the drop in new car manufacturing during Covid materially affected the number of vehicles coming back into the market for resale.
However, the group was able to ease the shortfall by increasing gross profit per unit by 10.7% thanks to ‘robust stock management processes’ as well as better performance in finance and insurance sales.
Ordinary dividends totalling £4,174,805 were paid but the directors didn’t recommend a further dividend payment.
Directors’ total remuneration in 2022 was £614,000 – nearly twice 2021’s £314,000 – with the highest-paid director receiving £320,000, which was more than twice the £157,000 they got the year before.
Drive Motor Retail was ranked 60th in the 2022 Car Dealer Top 100 list of most profitable dealer groups. The 2023 Car Dealer Top 100 will be out soon.
Pictured via Google Street View is Drive’s Vauxhall dealership in Weston-super-Mare
