Car dealer group Perrys saw profit plummet in 2022 after a ‘tough trading year’, its latest accounts reveal.
The group made profit before tax of £3.6m last year – down from a high of £11.9m in 2021 – a fall of nearly 70 per cent.
Revenue for the year, ended December 21, 2022, was up seven per cent on the year before at £643m.
Perrys has 58 outlets across the UK and represents brands including Ford, MG, Hyundai, Mazda, Peugeot and Vauxhall.
Writing in the annual Perrys Group Limited accounts, directors said that after the year ‘started well’, it suffered a series of setbacks.
‘Rising interest rates, new and used car supply issues and limited resource availability affected the middle six months of the year,’ said the firm.
‘The group responded well in the final quarter to deliver a result that, while behind budget, was ahead of initial expectations.’
The firm said that in previous years it had benefited from the bonus schemes manufacturers put in place, but there was less of this in 2022.
The group also explained that new car supply falling had a knock on impact on its used car supply and volume was affected as a result while it searched for other supply sources.
A ‘competitive labour market’ also made recruiting and retaining technicians for its workshops a challenge and this had an impact on the number of aftersales hours sold.
There were further setbacks for the group as a result of the war in Ukraine.
The firm said: ‘The ongoing conflict in Ukraine and continued supply chain issues affecting manufacturers created supply issues on replacement vehicle parts.
‘This has led to a significant backlog in the repair of vehicles, particularly product recalls. The group has had to increase its investment in loan vehicles as a result of this in order to keep customers mobile.’
The group said it managed to outperform the UK new car market with retail sales increasing four per cent to 8,556 units. Fleet sales rose a whopping 20 per cent to 2,860, but its sale of vans fell 20 per cent.
Used car sales fell 10 per cent down to 15,805 for the year. The firm said that used car margins also decreased and this, coupled with the reduction in the number of sales, saw profit from used car sales fall to £8.1m from £12m the year before.
Operating costs for the group also increased in 2022 by six per cent to £79m, mostly down to wages, rate rises and utility bills.
The group paid out dividends of £2m for the year – the same amount as it did the year previously.
The accounts also reveal that Perrys received a £4.3m payout in 2021 from its insurers which coughed up under business interruption cover following the national Covid-19 lockdowns.
Looking ahead to 2023, Perrys said it is evaluating new opportunities to expand its portfolio with the brands it represents and is pleased with how its new financial year has started.
Perrys said: ‘The group has traded ahead of budget up to the end of March 2023. New car performance has been strong with the group continuing to achieve good margins.
‘Cost control is a key area of focus, particularly energy consumption and working capital control, due to ongoing high energy prices, increasing interest rates and an increase in the volume of new vehicles now being supplied from manufacturer partners resulting in high stocking charges.
‘The group remains on track to achieve the 2023 budget.’