11:40 am, October 26, 2021
Euro Car Parts reported a £40m drop in profits in its full accounts for the year ending December 2020.
The car parts supplier explained how it operated at normal levels in the first quarter of 2020 but saw a ‘significant drop in demand and profitability’ in Q2 when the pandemic was most severe.
However, it also flagged changes to new cars that have seen them become more complex and more reliable as impacting sales.
It made sales of £1.05bn in the year and generated £6.1m in profit compared to £46m in 2019.
Sales also dropped by £29.7m but it added that the acquisition of 27 Andrew Page branches in July 2020 generated £25.4m in sales and the progress with e-commerce helped mitigate some of this.
Euro Car Parts also highlighted the increasing reliability of cars as impacting their business, as the first MOT at three years is important to the company but each year the number of failures requiring work to pass is falling.
Commenting on this in its list of uncertainties and risks, Euro Car Parts wrote: ‘Vehicles are becoming more complex and carry additional system failures.
‘Advances in vehicle design such as multiplex electrical systems and embedded telematics potentially give the manufacturers the ability to reverse their declining share in the UK parts aftermarket.
‘This risk is recognised by the board and currently protected by transitioned EU regulation which was designed to prevent consumer choice being reduced and the independent aftermarket being disadvantaged.’
It also revealed that took £20.5m in government assistance under the Coronavirus Job Retention Scheme and £3.8m in rates relief. However, company directors also did not take any dividends in 2020 for the second year.
