7:45 am, September 30, 2024
Bosses at the family-run Masters of Beckenham say they have ‘concerns’ around their relationship with Kia, after the group’s profits were cut in half following ‘supply issues’.
Car Dealer reported last October that the dealer group had drastically reduced its retail operations in response to its Mazda, MG and Renault sites not making enough money.
The decision, made in the middle of 2022, meant that the firm was left with only a single Kia dealership in Bromley.
Now, in the first full year of trading since the cuts, the group’s profits have fallen by more than 53%, according to new documents published via Companies House.
The annual accounts, covering the 12 months to December 31, 2023, show that, running a singular Kia dealership, Masters of Beckenham made a pre-tax profit of £1.12m, compared to £2.43m in the previous year.
The result continues a wider industry trend of dealers making significantly lower profits than last year, following on from the likes of Parkway, Eastern Western and Listers.
Industry experts recently told Car Dealer that the falling profits were largely as a result of shrinking margins and high interest rates, as well as things returning to normality after the pandemic.
In the case of the Kent-based Masters of Beckenham, the firm also saw turnover decline from £28.91m in 2022 to £24.58m.
In response to the results, bosses pointed to ‘supply problems’ which have continued into 2024.
Director Brian Cotton added that ‘there are some concerns with regard to product and the general relationship with the manufacturer’.
Aside from running its remaining Kia franchise, the company also operates an exhibition division, a design studio and investment properties.
Reflecting on the results, Cotton said: ‘2023 was the first year the group operated with just one motor dealership after having closed the other three in 2022.
‘This activity was supplemented with the diverse income from the exhibition division, design studio and from investment properties.
‘The remaining Kia dealership had a good year on the back of electric vehicles despite supply problems which caused some issues.
‘These have continued into 2024 which has made trading difficult and there are some concerns with regard to product and the general relationship with the manufacturer.
‘The exhibitions division also had a good year and continued to move its production into specific bespoke promotional marketing vehicles which is proving popular with a number of new clients.
‘These vehicles are generally built on a common base which streamlines production but as with many things, there have been problems in sourcing them.
‘The design studio invested significantly in new machinery during the year which expanded the services it was able to offer an ever increasing client base.
‘Income from the property division was in line with expectations in both the residential and commercial sectors. Planning delays continued ot cause problems at one particular property which could not be occupied until mid 2024.
‘The group now has a very diverse range of businesses which should form a solid base for some of the economic uncertainties that may present themselves in the near future.’
Results season so far…
- Eastern Western sees profits slide as Mercedes’ agency sales model sucks £50m from revenue
- Listers becomes latest car dealer to see profits tumble as shrinking margins hit
- Family-run Vindis Group sees profits wiped out but bosses ‘satisfied’ with performance
- Bosses at family-run Vospers warn of automotive ‘trade war’ as profits slump in latest accounts
- John Clark Motor Group breaks £1bn turnover barrier but pre-tax profit sinks by almost 10%
- Hartwell bosses happy with ‘strong financial performance’ despite 70% slump in profits
- Holdcroft directors award themselves 345% pay rise as profit takes a tumble
- Vines Motor Group sees profits slump as bosses blame wider economic factors
- Car dealer group Parkway is the latest retailer to see profits wiped out as firm takes 75% hit
- Lloyd Motor Group’s annual pre-tax profit falls despite upturn in revenue
Unlike most dealers, Masters of Beckenham has not revealed how much of its income was generated from the sale of goods – chiefly new and used cars – with directors saying it would be ‘seriously prejudicial to the company’s interests to analyse turnover by activity’.
However, the group has confirmed that it spent £2.51m on wages and salaries in 2023, compared to £2.24 in 2022. The rise comes despite staff numbers actually falling from 79 to 67.
Meanwhile, directors remunerations fell slightly from £141,238 to £140,683.
Dividends totalling £1.21m were proposed and paid throughout the year.
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