Inchcape Retail made a loss of £6.6m in 2019, accounts for the year published today (Feb 19) show – substantially down from its 2018 deficit of £40m.
The franchised dealership chain – part of the wider Inchcape Group and with dozens of sites across the length and breadth of England – also saw revenue fall by £78.3m, or 4.9 per cent, to £1.51bn.
It attributed the drop to offloading seven VW and Audi sites in July 2019 as well as the remaining Audi sites not performing as well.
Its operating loss was cut, too, from being £10m in the red in 2018 to a £4m deficit in 2019 as sales fell, although the gross profit margin went up by 0.4 of a percentage point to 10.7 per cent.
Pre-tax loss improved as well. Having had a deficit of £42.1m in 2018, Inchcape Retail’s 2019 loss came to £7.7m.
In their strategic report, which was approved on September 22, 2020, the directors commented on the effect of the pandemic as well as Brexit uncertainty – the latter being particularly significant as it holds the franchise for major German brands such as Audi and VW.
They highlighted uncertainty about the new vehicle and parts supply chain, saying a lot depended on their OEM partners’ actions and they were working closely with them.
But they warned that they were prepared to cut costs if necessary, depending on the medium-term impact on the UK economy.
They added that it was also unclear how different the world will be once coronavirus was contained and said the company’s top priority was ‘to execute on the plans it has in place for the months ahead, with a focus on making the organisation leaner and returning to business as usual, safely’.
As well as Audi and VW, Inchcape Retail also currently has franchises for BMW, Jaguar, Land Rover, Lexus, Mercedes-Benz, Mini, Porsche, Smart and Toyota, as well as having used car centres in Bolton, Burton, Cheltenham and Shrewsbury.
Pictured via Google Street View is the Inchcape VW dealership in Chester