9:11 am, January 9, 2024
Bosses at Wessex Garages say the firm was ‘unable to fully mitigate the key areas which impacted on its business’ as the dealer group saw its profits tumble last year.
Accounts published via Companies House last week show that the firm made a pre-tax profit of £2.03m in the 2023 financial year – well down on the £4.08m it made in 2022.
That is despite the documents revealing that in the 12 months to the end of March 2023, the firm actually saw its turnover rise from £188.98m to £223.14m.
Directors pointed to a number of difficulties experienced throughout the year including ‘the continued decline of diesel sales’ and ‘subsequent lack of supply of alternatively fuelled vehicles.
The accounts also cover the period of Liz Truss’s disastrous ‘Mini Budget’ of September 2022, which saw interest rates go through the roof, as well as the escalation of the Ukraine War.
Partly as a result, the Car Dealer Top 100 outfit says its year was negatively impacted by an ‘increase in inflation, interest rates and general economic uncertainty’.
Bosses also pointed to an increase in minimum wage and pension costs as a reason behind the company’s falling profits. Overall, the firm paid staff £12.56m compared to £11.45m in 2022.
When it came to income, the sale of goods brought in £212.23m and the rendering of services £10.9m.
The firm saw new car sales rise 14.5% to 5,966 from 5,210 but used car sales declined 8.7% from 3,806 to 3,475.
Meanwhile, new retail margins rose by £253 to £1,318 per unit despite a £177 dip in used car margins, which stood at £673 per unit.
Boss Chris Wiseman (pictured), who will be appearing at our Car Dealer Live conference in Gaydon in March, said: ‘The fiscal year ending March 2023 saw increase in turnover of £34.15m giving a profit of £2.03m before tax for the year. Net assets of the business are now £20.35m.
‘Factors affecting the industry are well documented, but the company was unable to fully mitigate the key areas which impacted on its business.’
He added: ‘The company, and industry in general, continues to feel the after-effects of Covid.
‘Significantly, the retention of existing staff and the recruitment of new staff is proving to be very difficult in an employment market characterised by a lack of skilled supply and reduced participation.
This is particularly evident with recruitment of skilled technicians. The impact is a growing cost base as demands for higher basic salaries increases.’
Wiseman will be sitting on an expert panel of franchised car dealers at Car Dealer Live, alongside Peter Smyth from Swansway and Sue Corkin, from Chorley Group.
Taking place on March 7, at the British Motor Museum at Gaydon, the event will bring together some of the biggest names in the motor trade to talk about their businesses and share their top tips.
Tickets are available now on the dedicated Car Dealer Live 2024 website for trading car dealers and suppliers to the motor trade. Streaming tickets for those who can’t make the day are also available.
