11:20 am, August 16, 2023
Eastern Western Motor Group saw its pre-tax profit drop by more than a fifth last year to £24.9m.
The Car Dealer Top 100 firm blamed the fall mainly on the removal of government rates relief, as well as inflationary increases such as salaries, interest payments, energy costs and a rise in rents.
It added that 2021’s result had included a £2.5m gain on revaluation of its investment properties.
In its results for the year to December 31, 2022, filed under Eastern Holdings Ltd, which have just been published on the Companies House website, the new and used car dealership chain said its profit before tax had fallen from £32m in 2021 – a drop of 22 per cent..
Operating profit sank by 19 per cent from £34.3m to £27.8m.
That was on a one per cent turnover drop from £818m to £810m, with new and used vehicle sales falling by a tenth.
However, gross profit rose by £600,000 to £100.2m – a 0.6 per cent increase.
Dividends paid during the year comprised a final dividend of £698.69 per share.
Eastern Western Motor Group was established in 1927, starting from a small rented lock-up in Edinburgh.
It now operates from more than 40 sites across Scotland, with a staff roll of over 1,600 and the franchises for BMW, Lexus, Mercedes-Benz, Nissan, Toyota, Honda, Mazda, Mini, Smart and Volkswagen.
In the accompanying strategic report, signed on behalf of the board by director and secretary Nasser Mohammed, the company said: ‘Overall, the directors are very satisfied with the group’s performance in 2022, considering new vehicle supply across many of our franchises was adversely affected throughout the year.
‘However, the stock position improved during the last quarter.’
Eastern Western added: ‘Although we had a very healthy order bank, the shortage of new vehicles being delivered adversely affected the supply of good-quality retail part-exchanges.’
Administrative costs went up by almost £5m, while energy costs rose by £700,000, and the ending of rates relief meant a £2.2m rise versus the previous year.
The company said that during the year it enhanced staff holiday provision, as well as improving their benefits package and flexible working patterns, commenting: ‘We are confident these actions will improve staff loyalty further and continue to make the group the employer of choice within the industry.’
Looking ahead, the directors said its Toyota Stirling dealership was currently trading from a temporary showroom alongside its Honda dealership but the site would be extended by early 2024 to allow for another seven-car showroom covering Falkirk and Stirling.
Eastern Western also bought a four-acre site in central Dundee for the Lexus and Toyota brands as well as for its Car Deal Warehouse used car supermarket operation, with construction of the 33,500 sq ft showroom beginning in April 2023 and due to be completed in November this year.
Meanwhile, to round off its Toyota representation, it bought an existing dealership in Dundee’s ‘Motor Mile’ – Dunkeld Road – to refurbish, with the site due to open in December 2023.
Pictured at top via Google Street View is Eastern Western’s Honda dealership in Stirling
