7:30 am, September 28, 2024
Bosses at dealer group Parkway say they are still feeling ‘positive’ despite the firm’s profits being slashed by almost 75%.
The Derbyshire-based retailer has this week become the latest dealer group to publish its annual accounts via Companies House, following on from the likes of Eastern Western Motor Group, Listers, Vindis and Vospers.
Similar to those groups, Parkway has reported a drastic reduction in pre-tax profit, despite turnover rising significantly.
The accounts show that in the 13 months to December 31, 2023, Parkway Derby Limited made a profit before tax of £1.45m. The result is 74.7% down on the previous year, when the outfit made £5.77m.
Meanwhile, the group’s revenue shot up to £227.97m having made £184.57m in 2023.
Directors have put the shrinking profit down to shrinking profit margins and continuing supply issues, while also highlighting the impact of the cost-of-living crisis.
Yesterday (Sep 27) Car Dealer ran a special feature on just why it is that dealers are not making as much money as they once were.
Reacting to the results, Parkway director Sean Booth said: The group remained resilient through 2023, despite significant challenges.
‘New vehicle supply began to return to pre-pandemic levels and we saw significant reductions to the values of used EVs at the beginning of the period.
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
- Lloyd Motor Group’s annual pre-tax profit falls despite upturn in revenue
‘The group also started to see a re-alignment of the market resulting in a rapid decrease of used vehicle stock values, effecting gross margins across both new and used vehicle sales, a trend observed industry-wide.
‘Vehicle supply began improving throughout the period, though at a slower pace than expected, resulting in sustained margins for most of the period.
‘However, in the final quarter, consumer confidence waned due to the rising cost of living and interest rates, causing margins to realign.
‘Aftersales faced challenges due to a national shortage of vehicle technicians. In response, the group has increased the number of apprenticeships to develop more in-house talent.
‘Despite these challenges, the group’s turnover increased by £43.3m to £227.9m for the 13 month period to December 31, 2023.
‘Although revenue increased, gross profit decreased. This decline was anticipated due to the realignment of supply issues and declining vehicle profit margins.
‘Increased utility and financing costs throughout the period, together with the sudden write down of stock required, impacted net profit performance, resulting in a net profit lower than the previous year’s exceptional results, yet still positive considering the stock realignment required running up to the period end.’
When it came to staff, Parkway increased its workforce from 315 employees to 330. In the period covered in the accounts, wages and salaries totalled £12.44m, compared to £10.25m in 2022.
