Car dealer group Stoneacre saw profit before tax drop by 33% to £24.8m as rising inflation and a cost of living crisis took a bite out of its profits.
Decidebloom Limited – the group’s official company name – is a 63-site car dealer group that represents 25 manufacturers.
It saw revenues increase to £1.3bn in its latest set of accounts, just filed at Companies House, which cover the period to the end of April 2023.
The firm says its directors were ‘pleased’ with the results as shareholder funds increased from £131m in 2022 to £151m in 2023.
Directors explained that inflation and a cost of living crisis had impacted sales in the motor trade while a ‘skills shortage’ of technicians has seen wage bills surge.
The dealer group says it has also had to battle parts costs rising as well as surging energy bills, due to the war in Ukraine.
Stoneacre was 12th in the Car Dealer Top 100 list of most profitable dealers in the UK, published earlier this month.
During the year, the group sold 24,581 new cars (2022: 27,363) and 31,532 used cars (2022: 32,047). The comparative figures were not given in the 2023 accounts, but were published last year.
Revenue attributed to car sales stood at £1.2bn in 2023.
The firm said: ‘The franchised dealer network continues to consolidate with OEMs rationalising the locations they wish to trade from and also the dealers they wish to work with.
‘This has resulted in several changes in the franchise representation across the company.’
No specific details were given as to what those changes were during the year.
The firm added that during the year it had renovated a number of its showrooms, though, including three Seat, two Toyota and one Volvo.
Stoneacre’s vehicle auction business, based in Newark, sold 29,271 cars compared to 29,368 the year before.
In the service department of the group, revenues rose 8.6% to £123m. The firm said it moved to a seven-day service operation during the year offering its technicians four days on and four days off which had been ‘efficient and profitable’. It has also improved its technicians’ ‘work-life balance’.
The group’s accident repair centres saw profit increase by 40% during the year which came after ‘negotiation of more commercially viable contracts’, explained the company.
Meanwhile, parts revenue increased by 12% due to the ‘continued success’ of its parts distribution business based in Doncaster.
A further ‘parts hub’ in the north east of England began trading during the year and Stoneacre says it has plans to further expand the business into Blackburn and Peterborough.
At the end of its financial year, the group employed 2,796 while the highest paid director received remuneration of £2m, down from £3.2m the year before.
Separate accounts for Stoneacre Limited, the ultimate parent company, show revenues broadly in line with Decidebloom Ltd at £1.3bn, but profits of £31.8m, down from £43.1m the year before.