7:18 am, August 15, 2023
Premium car dealer group Harwoods Limited has seen profits drop by 43 per cent for the year ending December 31, 2022 – down by more than £4m from its bumper 2021.
In total, profit before tax (excluding dividend income) was £5.3m compared with £9.4m in 2021.
Turnover increased by more than £50m during the 12-month period, up to £636.3m from £581.1m in 2021.
The group, with locations across the south of England and franchises for JLR, Aston Martin, Bentley, Ineos and others, saw gross profit rise but increases in expenses and the absence of government incentives resulted in the drop in profit.
It also reported a fall in return on sales to 1.3 per cent from 1.9, gross margin down to 12.3 per cent from 12.9 and return on capital investment down from 15.5 per cent to 10.8.
In the annual results, published via Companies House, the Harwoods board wrote: ‘2022 results show a good level of profitability despite supply chain issues affecting the supply of new and used cars.
‘The group maintained its new car volumes and experienced strong margins. Used car volumes remained consistent with prior year. However, there was a small decline in margin. Aftersales revenue and margin also improved.
‘Operating costs increased in the year however decreased as a proportion of turnover from 11.2 per cent to 11.1 per cent in the year.’
Explaining the drop in profit, the board reported: ‘At 31 December 2022 the group had a net overdraft of £6,847k (2021 – net cash of £7,728k) and vehicle stocking loans of £60.1m (2021 – £51.5m).
‘The group recorded a cash outflow for the year of £14.6m (2021 – inflow of £5.4m), which is primarily due to the profitability in the year less payments made to reduce the group’s credit facility and capital expenditure.
‘Net assets increased in the year by 4.7 per cent to £75.0m (2021 – 9.1 per cent to £71.6m) as a result of the trading performance less dividends paid.
‘Net current assets decreased in the year to a liability position of £903k (2021 current asset of £8, 487k) mainly as a result of the fall in cash levels as detailed above.’
