5:27 pm, November 26, 2020
A Scottish dealer group lost more than £700,000 in the first half of 2020 due to the Covid-19 pandemic.
Family-owned Hawco Group has dealerships in Inverness, Elgin and Peterhead selling new Volkswagens, Audis and Skodas.
The group has released its full-year results for 2019 in October and in the statement revealed that it lost £726,000 due to lockdown.
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However, it remained positive and said as of Q4 2020 it expected to be back to breakeven.
It said: ‘With continued uncertainty surrounding Brexit, business interruption due to the global Covid-19 pandemic and risk of further disruption, the times ahead are increasingly uncertain.
‘The board has however demonstrated in recent years, its ability to react quickly, make difficult decisions, manage cash-flow and adapt the business to the changing environment.
‘The business lost £726,000 in the first half of 2020, as a result of business interruption from late March to end of June as a result of the pandemic.
‘Trading performance has been strong in the two months since reopening and we expect to be back to break even by the end of Q3.’
The group explained in its results that, following two significant years of profit growth, it had expected to see further improvement in 2019.
In fact, due to new car supply issues it saw turnover fall by 1.5 per cent and operating profit fell by 28.7 per cent.
Both were loss making figures, with an operating loss of £643,000 and turnover down to £73.8m in 2019.
The 65-year old group added that at the half point in the year it was 18.4 per cent ahead of budget but in the second half of the year it was ‘severely impacted by new car supply due to the the next phase of the new vehicle testing regime RDE2’.
It reported that turnover fell due to a decline in vehicle sales but that its volume fell by 4.5 per cent, which was slightly ahead of the Scottish average of 5.45 per cent.
Hawco Group said: ‘Increased stock levels as a result of self-registration activity necessitated by RDE2 deadlines and the Q4 reduction in demand resulted in interest payments increasing by 21.3 per cent to £576,000.’
It was positive about the overall state and performance of its business today, though, and the changes it had embraced since the pandemic.
‘The motor industry is evolving rapidly to react to external influences such as the changing retail landscape, changes in consumer expectations, the move from traditionally fuelled vehicles and the new challenges relating to social distancing as the result of the global Covid-19 pandemic,’ it said.
‘It is important that the business embraces these changes, whilst remaining agile and efficient if it is agile and efficient if it is to continue to prosper.
‘Our strategy continues to be to adapt, embrace new technology and maximise the potential of our existing assets in order to operate profitably and deliver excellent customer service.
‘Improved people management is key to this, and an area where we continue to increase investment, and use enhancements in technology to improve staff communication, training and development.’
Picture credit: Google Maps/Hawco Volkswagen Inverness
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