The most profitable car dealers in the UK have finally been revealed as we pull the covers off our Top 100 list for the first time.
Topping the league table – which includes franchised and independent dealers for the first time – is automotive retail juggernaut Arnold Clark.
The Car Dealer Top 100, compiled in association with ASE Global and sponsored by GForces, ranks dealers by EBITDA, with adjustments made for exceptional items.
In total the car dealers in our Top 100 list made a combined profit of £1,166,359,116 in 2019 – the latest figures available – and turned over a whopping £55,830,325,500.
Arnold Clark, the Scottish-based dealer group led by CEO Eddie Hawthorne, generated a £194.3m EBITDA profit from revenues of £4.46bn in 2019.
Hawthorne told Car Dealer he believed his group ‘got the result they deserved’ and pointed to the company’s exceptional used car business as a key driver for the numbers.
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ASE Global’s Mike Jones, compiler of the Top 100, said pulling the list together had been ‘a challenge’ and explained EBITDA had been used to rank the list as it was ‘the fairest way’.
Accounts up to the end of March this year were considered, but many dealer groups have used the extension until the end of the year to submit their numbers. Omissions will be included in a round-up in the new year.
Jones said the list attempted to ‘see the wood for the trees’ when it came to assessing pure profitability and added that the list mostly excludes any impact from coronavirus too.
Jones said: ‘It won’t surprise anyone who’s in the industry to know that Arnold Clark is the top ranked profit generator. They’re the fourth largest in turnover terms in the industry but the largest generator of profit over the course of the 12-month period.’
Jones said Arnold Clark ‘does a lot of things brilliantly’ with the ‘whole business focussed around driving profit’.
Tim Smith, from headline sponsors GForces, added: ‘Arnold Clark retain customers, they sell services to those customers, they keep them within the organisation for a long time, and that’s a major win for them. And obviously the scale they do it at – that’s the reason they’re so profitable.’
The Car Dealer Top 100 list pitches independents against the franchised dealers too – and the highest ranked independent on our inaugural list was Trade Centre Group, in seventh place.
The group turned over £256m and managed to eke out a staggering 8.3 per cent return on those sales, making £25.1m EBITDA profit.
Andy Coulthurst, CEO of the Trade Centre Group, said: ‘I’m proud and the team will be proud, but to be honest with you we were a bit disappointed in that year because we were probably around 10 per cent off where we wanted to be.
‘But we’re never happy – we’re always striving to get that little bit more.’
Mike Jones said the group had ‘nailed it’, though.
He added: ‘If you look back over time we’ve always had some very profitable used car supermarkets and they’ve clearly expanded out of their original regional base and are making great returns.
‘Trade Centre Group already have it nailed and they’re doing it well and they’re doing it to the benefit of the customers and the shareholders and the people working within the organisation.’
GForces’ Smith added: ‘The dealers that do it right and started their operation a long time ago and have been finessing and finessing are the ones that get results and you see Trade Centre wows it. It’s an absolutely staggering performance.’
Jones and Smith joined us for a special Car Dealer Live show discussing the results which you can see at the top of this post.
Comments from both Hawthorne and Coulthurst are also included in the video feature. The full interviews will be published in the Car Dealer Live section of this website soon.
Some large dealer groups have been missed off this year’s list as they are yet to submit accounts.
Jones said: ‘The Covid crisis has meant that not everybody has submitted.
‘You would normally expect everyone to file their accounts within nine months of the year end, because of this year, Companies House have extended the deadline until December, for December year end last year, and as a result we’ve got some of the big players that haven’t filed.
‘I’ll be looking to update the list with you later on and at the start of next year once the players are all there.’
Jones said he expects next year’s list to be fascinating as it takes into account the Covid year and believes many dealers will have made ‘significant profit’ in 2020.
He added: ‘There’s been a great return generated while people have been able to be open and people have also pivoted into more personal things with the customer whether it’s click and collect or home delivery, etc, so the industry has changed and I’m expecting some strong profit numbers.’