8:38 am, August 9, 2022
Dealer group Parkway saw its profits double to £7.3m in 2021 with bosses hailing an ‘exceptional’ year for the outfit.
The retailer represents Volkswagen at dealerships in Derbyshire, Leicestershire and Northamptonshire and enjoyed a stellar 12 months to November 30, 2021.
New accounts, published via Companies House, show that the firm saw its turnover shoot up from £126.1m in 2020 to an eye-watering £160.1m in 2021.
That additional income allowed the group to report a record-breaking pre-tax profit of £7.3m in the period covered by the accounts. The figure represents a year-on-year rise of 109 per cent.
The ‘phenomenal’ result was made possible by sky-high used car prices, which saw several dealer groups return huge profits last year.
Despite the beginning of 2021 being rocked by national lockdowns, Covid began to have less of an impact as the year wore on.
As a result, Parkway slashed the amount it claimed in furlough cash from £1.6m in 2020 to £587,032 in 2021.
Overall, the firm paid its staff wages and salaries totalling £9.6m in 2021, a slight rise on the £9.1m it shelled out in 2020.
‘Phenomenal’ profits the result of an ‘exceptional’ year
Included in the accounts was a statement from director, Sean Booth. He said: ‘2021 has been an exceptional year in many ways which resulted in the group making phenomenal profits.
‘The industry as a whole has seen vehicle profit margins saw as demand outstripped supply of both new and used vehicles. This was despite the continued disruptions caused by the social and economic restrictions due to the Covid-19 pandemic.
‘The year started with yet another national lockdown throughout quarter one resulting in the closures of the showrooms once again across the group.
‘The dealerships remained open for vehicle servicing and continued to sell new and used vehicles online, which the company had learned to do very quickly and effectively in the previous lockdowns and was able to mitigate the effect of the showroom closures very well.
‘As the year continued and restrictions lifted, it became clear that there was a built up demand which resulted in the transactions across the business increasing back to pre pandemic levels as we saw unprecedented levels of customer demand for both new and used vehicles.
‘But, as we progress into quarter two, with the pandemic seemingly behind us, the group was met with substantial supply shortages due to the global shortage of semiconductors and other raw materials affecting the entire industry.
‘The fall in new car sales did, however, result in maintained margin of new units sold. As the supply of new cars fell, subsequently, the customer demand for used vehicles soared, often outstripping supply.
‘This increased margin retention significantly and outweighed the negative impact of the volume shortages.’
