6:47 am, March 12, 2025
Luxury car dealer group Harwoods has clocked up a worrying £11.8m loss before tax in its latest accounts.
The group which represents brands including Audi, Aston Martin, Bentley, BYD and McLaren turned over £627m for 2023, accounts just filed at Companies House reveal.
The group swung to the huge loss from a £5.6m profit in 2022 – a 311% change in fortunes. The loss for 20223 after tax was £10.6m.
The dramatic used car price crash that took place in the final quarter of 2023 hit the company severely as it was left holding ‘demonstrators and courtesy cars’. It also blamed rising interest charges for its turn in fortunes.
As a result of the trading performance, Harwoods admitted that ‘some of the group‘s banking covenants had not been achieved’.
This had resulted in the long term loan to the group falling due within one year.
Harwoods said that the group’s bankers ‘continue to support’ the business and have ‘waived these covenant breaches’ and agreed new ones for 2025 which the dealer is ‘forecast to achieve’.
The group is predicting it will make another loss for 2024, albeit at a slightly smaller level and then return to profitability this year.
As a result of the performance, a review of the business led to Land Rover in Croydon, Edenbridge and Pulborough being dropped, and it only now represents Jaguar in Brighton. It has also diversified from premium brands, taking on Chinese car maker BYD.
In a statement, CEO Archie Harwood said: ‘2023 was a challenging year for the industry and group, where vehicle margins deteriorated throughout the year.
‘As well as increased interest costs and stocking charges, the preceding post-covid period of tight supply led to a combination of relaxed stocking policies, unusual specifications and inflated prices.
‘New car supply improved over the year, which in turn affected the used car market with prices beginning to realign themselves to previous levels.
‘This impacted the group’s profitability, as prices fell sharply, and large provisions were taken against stock at the year end.’
Harwood pointed out the group had seen improved aftersales growth and had ‘continued to invest’ in the business.
Former Volvo UK MD Jon Wakefield stepped down from his position as CEO at Harwoods with immediate effect in September and Archie Harwood took over again.
In 2023, the highest paid director received emoluments of £750,729 including pension contributions.
In a statement issued to Car Dealer, Harwoods added: ‘A number of manufacturers in the Harwoods Group portfolio faced product challenges in 2023.
‘Bentley Motors reported an 11% drop in vehicle sales for 2023, with sales down across its top three markets – Europe, the Americas, and China. At the time, the British luxury car maker cited rising costs and slowing economies as a driving factor for its fall in sales.
‘Harwoods Group also noted that McLaren experienced issues with completing the development of its product line in 2023, and INEOS Grenadier has similarly suffered from supply chain issues during the period.’
The firm said it will now have a ‘major focus’ on used cars and has launched Harwoods Assured, a new used car platform.
The statement added: ‘Harwoods will focus on improving this offering in 2025 where it will offer Harwoods Assured used cars with a much greater variety of premium used cars brands on offer.’
