11:24 am, January 13, 2025
Dealer group Hedin Automotive has blamed Mercedes-Benz’s agency sales model and recession in the UK among other reasons for it finishing 2023 with a £7.6m pre-tax loss.
The business, which is a subsidiary of the Swedish motor retail giant Hedin Mobility Group, turned over £211.5m for the year ended December 31, 2023, generating a gross profit of £31.6m, latest accounts show.
However, operating losses came to £4.06m, pre-tax losses totalled £7.6m; EBITA was a £4.1m loss while net assets were valued at £4.76m.
The company blamed its loss-making performance on Mercedes-Benz adopting the agency sales model, the UK entering recession in the second half of half of 2023, ‘new systems and procedures’, initial closure of its Mercedes businesses for staff training after acquisition, and a bad debt provision of £1.97m.
Chief executive Anders Hedin said: ‘2023 was a challenging year for us due to the economic climate, our business model transition, and unexpected financial setbacks.
‘However, we remain confident that our strategic investments will yield positive results in the long run.’
In April 2023, Hedin Automotive snapped up four dealerships from Mercedes-Benz Retail Group. One of those was the German car maker’s halo Brooklands site at Mercedes-Benz World, which Hedin now uses as its registered office.
The Mercedes-Benz Retail Group deal came in the same week as Hedin making a £400m move to acquire Pendragon, which later fell through.
In late 2023, Hedin further expanded its UK footprint by purchasing BMW and Mini dealer group Stephen James.
Commenting on the outlook for 2024, CEO Hedin said: ‘In the initial 2024 trading period, the group reports stronger sales volumes in all areas and has completed a full cost review which will significantly reduce the group’s cost base moving forward.
‘Whilst there will be initial costs of implementing the cost base realignment we expect to be trading profitably by the end of 2024.’
