7:13 am, June 16, 2024
New and used car dealer group Waylands Automotive saw its pre-tax profit drop and turnover rise by the same percentage last year.
Its newly published accounts for the year ended December 31, 2023 show that it made £2.504m profit before tax – down 19% on 2022’s figure of £3.107m.
That was on turnover that went up by the same percentage from £168.4m to £200.9m. Meanwhile, Ebitda for the Car Dealer Top 100 firm rose by 9% from £4.75m to £5.16m.
The family-owned company, whose registered office is in Reading, holds the franchises for Volvo, MG and Kia, as well as acting as an agent on behalf of Polestar, and has showrooms in Bristol, Newbury, Oxford, Reading and Swindon.
In the group strategic report, signed on behalf of the board by controlling party and majority shareholder John O’Hanlon, the directors said they were pleased with its performance, having enjoyed the sixth year of growth in a row.
That was in spite of ‘the challenges in the year resulting from a higher inflationary environment and resulting increase to interest costs’ and suffering ‘significant cost headwinds’.
The directors also said logistics disruptions within the UK had led to ‘supply volatility’ regarding new vehicles,
Waylands faced ‘particular challenges’ with used electric vehicles during the first quarter, mainly because of the ‘new car pricing activities of particular OEMs’, but it believed that would be an ‘exceptional’ occurrence.
Meanwhile, used car prices suffered in the last quarter because of demand-led pressure but had stabilised during 2024’s first quarter, as expected.
The directors also highlighted how the general economic environment and levels of consumer confidence had a direct effect on demand for vehicles, with money pressures caused by rising inflation and energy prices affecting disposable income.
They said: ‘Whilst it has been promising to see the confidence stabilise in 2024 and continued inflation reduction, the second half of 2023 did experience significant challenge from these factors.’
During 2023, Volvo switched to the agency model, and Waylands said the changes to the trading arrangements meant that revenue was no longer recognised by the group for the manufacturer’s vehicles, with new car stock being removed from the balance sheet.
This meant ‘material reductions to these balances’, with the full impact of the change to the financial statements not likely until the end of this year.
Waylands said it shifted 4,501 new cars and 3,143 used – both increases on 2022’s figures of, respectively, 3,329 and 2,333, resulting in a gross profit of £9.2m for new and £6.9m for used – a gross profit improvement of 11.2%
Aftersales revenue, meanwhile, rose from £15.1m in 2022 to £19.5m last year, giving a gross profit of £10.2m versus 2022’s £8.2m.
The average monthly number of employees rose from 211 to 248.
Meanwhile, directors’ emoluments fell from £812,202 to £727,846, with the highest-paid director receiving £347,881 versus £383,633 the year before. The directors didn’t recommend paying a dividend.
They commented, though, that trading so far in 2024 had performed in line with expectations after ‘a marked strengthening from the final quarter of 2023’.
As such, they are predicting ‘good levels of profitability’ this year.
Pictured at top via Google Street View is the Waylands Volvo showroom in Reading
