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Car dealer Harwoods profit drops by 43 per cent in 2022 latest set of accounts

  • Harwoods saw profit fall by more than £4m in 2022
  • The luxury car dealer sells Aston Martin, Bentley, Ineos and more
  • Revenue grew but costs within the company also increased
  • It says payments made to reduce its credit facility were one reason for the expenditure

Time 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.

In 2021, it claimed £803,792 under the furlough scheme, down from the £3,705,975 it received in Coronavirus Job Retention Scheme grants in 2020.

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.’

Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

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