10:23 am, January 11, 2023
Allen Ford’s huge profit last year was mainly down to a multi-million-pound business interruption insurance payout because of Covid.
The dealer group made £27.6m in pre-tax profit for the year ended June 30, 2022 versus £7.5m the year before, latest accounts show.
The Warwick-headquartered business said it enjoyed higher margins in new and used cars because of the squeeze on vehicle supply, with rising used car prices and ‘well-controlled costs’ helping as well.
Further investigation into the accounts revealed that it received £20.5m in insurance compensation during the period for business interruption caused by the pandemic. It didn’t get anything the year before.
The figure was listed as exceptional income and saw Allen Ford as one of only a small number of dealerships to have been paid the insurance.
The news has been hailed by chartered accountants UHY Hacker Young, which said that not only had very few companies taken out the cover but a lot of them had even been told they weren’t covered.
As a result, some dealerships have launched challenges and possible claims are being looked at again.
UHY Hacker Young corporate finance partner David Kendrick told Car Dealer today: ‘This is great news for Allen Ford and one of the very few companies we are aware of who had cover for this.
‘When the pandemic hit, we worked closely with a specialist legal firm reviewing a huge number of policies for dealer groups and only one out of this sample had cover.
‘Many were told they weren’t covered, some of whom have challenged this and potential claims are being reviewed.
‘This is great news for Allen Group and a huge sum received. A shame it wasn’t covered for all dealers as that would have been the cream on top of the cake.’
Joel Combes, managing director of Lawgistics, told us: ‘Without seeing all the paperwork, we can only assume that Allen Ford paid a very high premium which meant they could take advantage of some very attractive terms that enabled them to claim, regardless of any profits.’
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