10:11 am, October 6, 2023
Masters of Beckenham saw its pre-tax profit rise by almost 60 per cent last year after shedding three of its four franchises because they weren’t making enough money.
In its newly published accounts for the year ended December 31, 2022, the new and used car dealership said it made £2.434m profit on ordinary activities before tax versus £1.538m in 2021 – an increase of 58 per cent.
However, it didn’t release its turnover figure for the year, saying in the accompanying strategic report: ‘In the directors’ opinion, in view of the intense competition within the industry, it would be seriously prejudicial to the company’s interests to analyse turnover by activity.’
Last year, it posted turnover of £46.38m for 2021 – a 9% increase on 2020’s figure of £42.37m.
The dealership offloaded the franchises for Mazda, MG and Renault in the middle of 2022, leaving it with just Kia.
The directors said in the report, signed on behalf of the board by company secretary and finance director Brian Cotton: ‘It had become increasingly difficult to achieve satisfactory profit levels and alternative use of the premises for commercial rental would give a significantly higher return.’
It already had a portfolio of investment properties with residential and commercial tenants. As a fixed asset, they were valued at £14.9m. During the year, it received £520,807 in net rent – down from the £531,198 it made in 2021.
The directors added: ‘The remaining franchise had growth potential and a good product reputation. By retaining it, existing management skills could be focused more intensely on this area of the business to improve overall performance.’
But it acknowledged staff redundancy costs caused by branch closures. The average monthly number of group employees fell from 103 to 79.
Directors’ emoluments fell from £146,631 to £141,238.
Masters – which also operates a design studio – said two of the dealerships were stripped and fitted out for letting but problems securing planning permission delayed getting some income.
However, the directors said the business was now in a position that was believed to be ‘optimal for a balanced income from property rental, garage activities, product manufacture and design services’.
The report added: ‘The directors are pleased with the results for the year and are confident the business is on a good footing for future financial security and improved profitability.’
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Pictured via Google Street View is Masters of Beckenham’s Kia dealership
