7:05 am, September 25, 2023
Pre-tax profit at the UK’s most profitable car dealership Arnold Clark plummeted by more than a third last year to £173.5m.
The top-ranking company in the current Car Dealer Top 100 of the UK’s most profitable dealerships said in its newly published accounts for the year ended December 31, 2022 that despite a ‘positive trading performance’, it was hit by ‘significant increases’ in its underlying operational costs.
Employment bills were cited as a major factor, as were rising property rates, finance and utility costs.
It said profit before tax fell by 34 per cent from £263m in 2021, while group operating profit tumbled by 31.3 per cent from £277.7m to £190.7m.
That was on a turnover that rose by almost four per cent from £4.741bn to £4.922bn.
Despite that, 2022 was still its second most-profitable year, it said. CEO and group MD Eddie Hawthorne told Car Dealer last year that 2021 would be seen as a ‘Carlsberg year’ as the group recorded record results.
Arnold Clark, which prides itself on being the UK’s largest independently owned family-run car retailer with 193 dealerships stretching from Elgin to Southampton, shifted 192,904 used cars and 55,820 new cars – down 13.9 per cent and 1.7 per cent respectively from 224,071 and 56,780.
In his accompanying statement, Hawthorne said Arnold Clark’s employees were ‘key to the continued success of our group’, and he thanked them for what they’d done to look after customers and ensuring the company’s financial stability.
As such, in December the directors authorised a rise in staff bonus earnings because of the rising cost of living and brought forward by three months its annual pay review of up to nine per cent to take effect from January 1, 2023.
He added: ‘I would also like to express thanks to manufacturers, finance, banking and business partners who continue to work closely with us to support the business in many ways.’
Interim dividends of £67m were paid – up from £61.1m in 2021 – but the directors recommended that no final dividend should be paid.
Directors’ emoluments totalled £11m – up from £10.9m in 2021 – while the highest-paid director received £4.6m, which was down on 2021’s £6.4m.
In December 2022, Arnold Clark fell victim to a cyber attack, which is acknowledged in the strategic report, signed on behalf of the board of directors by Hawthorne.
Initially, it wasn’t believed that any customer data was taken, but Arnold Clark subsequently admitted that some personal data of its customers had been stolen by the hackers.
In the strategic report, the dealership says it’s taking mitigating actions, including working with cyber security specialists and testing IT contingency plans. It also states that it is investing ‘in robust IT systems’.
Last year, we interviewed Hawthorne when the dealership came top in our Car Dealer Top 100 with an Ebitda profit of £398.1m. You can see the video at the top of this story.
