10:02 am, October 11, 2024
Bosses at Drive Motor Retail say the company performed ‘well ahead of its peer group’ last year, despite profits sliding by more than 40%.
The Leicestershire-based retailer is the latest dealer group to post its annual accounts for 2023, with the figures largely showing a continuation of wider market trends.
Documents filed with Companies House show that pre-tax profits fell from £5.64m to £3.24m in the 12 months to December 31, 2023, despite turnover rising from £279.77m to £311.21m.
Directors say the slide in profits – a dip of 42.6% – can be attributed to ‘a backdrop of economic uncertainty, political unrest and an ever-changing landscape within the automotive sector, particularly the ZEV mandate’.
They also admitted that supply constraints had caused issues last year, contributing to the second year of profit decline in a row.
Several dealer groups have made similar complaints in recent months, with profits largely down across the board, despite the majority of firms enjoying increased turnover. You can read Car Dealer’s investigation into why profits are down here.
Elsewhere in Drive Motor Retail’s accounts, it is revealed that the vast majority of the firm’s improved turnover (£288.56m) came from the sale of goods, namely new and used cars, with the rendering of services raising a further £22.64m.
Overall, new vehicle sales within the company grew by 18.9%, with MG sales volumes alone shooting up by 16.6%. Meanwhile, used vehicle sales grew by 3.5% compared to 2022.
The Car Dealer Top 100 retailer also revealed that its average staff numbers grew from 642 to 650, with wages and salaries costing £23.04m.
At the end of the year, a final dividends of £3.51m was paid out, down from last year’s figure of £4.17m.
Results season so far…
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- Lloyd Motor Group’s annual pre-tax profit falls despite upturn in revenue
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- Available Car losses hit £10.8m following another challenging year for the used car dealership
- Amari Supercars sees profits dip as income from luxury vehicle sales takes a slide
- Big Motoring World posts slashed profits in last full year under the control of Peter Waddell
- Chorley Group posts record turnover but swings to £983k pre-tax loss in 2023
Writing in the accounts, secretary Stuart Harrison said that directors were ‘satisfied’ with the overall performance.
He said: ‘Drive Motor Retail Limited delivered a profit before tax of £3.2m in 2023 (2022: £5.6m). The performance was delivered against a backdrop of economic uncertainty, political unrest and an ever-changing landscape within the automotive sector, particularly the ZEV mandate.
‘Supply constraints continue to impact new and used vehicle availability.
‘Despite the challenges the company demonstrated its resilience and ability to maintain returns ahead of its peer group.
‘The trading performance in 2023 demonstrates that the group’s proven operating practices and ability to adapt and evolve to meet industry challenges ensures continually strong performance benefiting of our customers, colleagues, manufacturer partners and shareholders.
‘The challenges facing vehicle sales have been mitigated in the year by considerable growth in service and bodyshop operations.
‘Drive Motor Retail Limited returned profits well ahead of our peer group in terms of return on sales and capital employed.
‘The directors are satisfied with the performance of the group and the strength of the balance sheet, which put the group in a strong position to continue delivering leading returns for its stakeholders.’
