Bosses at Glyn Hopkin say they are ‘pleased’ with the dealer group’s performance in 2022, despite the firm’s profits taking a major hit.
Accounts recently published via Companies House show that the London-based retailer experienced a near-60 per cent slide in the 12 months to the end of December last year.
Despite this, directors have insisted that the period was a successful one for the firm and say the decline is down to the ‘lasting rippling effects’ of the pandemic.
The documents showed that the outfit’s pre-tax profits fell from £12m in 2021 to £5.5m in the most recent financial year.
Those in charge say that was largely down to 2021 being ‘an exceptional and highly abnormal year’ for the industry as a whole.
Despite the setback, there was plenty of good news in the accounts, with Glyn Hopkin’s turnover up from £452m to £520.7m – a hike of 15.2 per cent.
Of that improved revenue, the vast majority (£490.05m) came from the sale of goods, with the rendering of services – for example, aftersales – also contributing £22.43m.
The year also saw the firm increase its dealer network with the opening of a new MG dealership in Bedford during Q4.
It also bought a Mill Hill Nissan site from Westway in September and an east London Kia site in June.
In a statement included in the accounts, director Hady Laba said: ‘2022 proved to be a challenging year operationally due to the lasting ripple effects of the Covid-19 pandemic on vehicle supply globally.
‘The new car market was 1,614,063 units in 2022, a decline of two per cent on the 1,647,181 units in 2021. This volume represented a 30-year low and was 700,000 units below the pre-pandemic level in 2019.
‘However, the SMMT forecasts the market will grow to around 1.8m units in 2023.
‘Turnover for 2022 was £520.7m compared to £452m, which represents a 15.2 per cent increase. The company pre-tax profit for 2022 was £5.5m down from £12.0m in 2021.
‘Despite the fall in profits, the directors are pleased with the results in that 2021 was an exceptional and highly abnormal year not just for the company, but for the motor trade in general due to consumer demand far outstripping the supply of vehicles during the pandemic.
‘This led to significant but temporary increases in both new and used vehicle margins. In addition, the sector received significant benefits from government schemes and assistance in 2021.
‘However, supply shortages which carried on through 2022 have continued to lead to the absence of pre-registration activity by car manufacturers, which has helped profitability.
‘Despite the low volumes in the new car market in 2020-22, the company has consistently managed to increase turnover from £368m in 2020, £452m in 2021 to nearly £521m in 2022.’
As well as falling profits, the accounts show that Glyn Hopkin saw its operating margin fall to 1.2 per cent, compared with 2.9 per cent in 2021.
The firm paid staff costs for its 856 employees totalling just over £37.47m, with its highest-paid director receiving £734,000.
Looking ahead, bosses say they are ‘cautiously optimistic’ about what 2023 could bring, in what is the firm’s 30th anniversary year.
‘Despite the uncertain economic outlook for 2023 and a stagnant economy, the directors remain cautiously optimistic regarding the coming year,’ added Laba.
‘The continued easing of supply restraints will provide additional profit opportunities, providing of course we do not move into a period of over supply with the resulting pre-registrations this can entail.
‘The group also benefits from good customer retentions and a large percentage of our customer base have purchased cars on PCP schemes, therefore securing a significant level of repeat sales.’