Peter Vardy Group saw its profits take a ‘significant’ hit last year with bosses pointing the finger of blame at a lack of used car supply.
Accounts seen by Car Dealer, show that Peter Vardy Holdings Ltd made a pre-tax profit of £4.8m in the 12 months to December 31, 2022.
The figure represents a 46 per cent decrease from the previous year, when the Scottish dealer group made a £8.9m before tax.
As a result of the tumbling profits, the firm’s EBITDA figure also dropped from £15.7m to £11.9m.
In the accounts, directors say that the profitability had been ‘significantly impacted by a reduction in used car supply and the resultant margin erosion’.
It was those issues that led, in part, to the closure of two of the group’s two purpose-built ‘Peter Vardy Carz’ supermarkets in Dundee and Glasgow, earlier this year.
However, the board say they feel a ‘sense of excitement’ going forward into the firm’s centenary year in 2023 and remain ‘confident’ in their long-term-strategy.
That sense of positivity is supported by other areas of the accounts, which showed that the group continued to make progress last year, despite headaches over supply.
Group turnover rose from £560.7m to £590.5m, while the the firm’s balance sheet ended the year with net assets of £97m.
There was also strength in the new car sector, where the group saw its average margin per vehicle increase by £3,188 per vehicle.
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In a statement included in the accounts, Vardy said: ‘The group profitability has been significantly impacted by a reduction in used car supply and the resultant margin erosion unfortunately impacting the majority of the group’s retail outlets.
‘However, the group has seen outstanding financial successes in the year in the new car department. The new car contribution to group profitability rose by £3.9m or 79.6 per cent year-on-year.
‘Whilst new car volume actually reduced by 28.1 per cent due to an instability in supply, our average margin per vehicle increased by £3,188 per vehicle, as a result of selling more high end premium product in our Porsche, Jaguar Land Rover and BMW and Mini franchises.’
He added: ‘The board is confident in its long term strategy of balancing its investment between four key segments of the automotive industry: Luxury Retail Brands, CarMoney consumer finance, Mobility services and CARZ (our used car brand in Scotland).
‘The strength of the balance sheet clearly gives the group an advantage as it navigates the changing landscape of the UK automotive sector. That gives the board confidence and a sense of excitement.’
Peter Vardy will be a headline interviewee at our Car Dealer Live conference in Gaydon on March 7, 2024. Get your tickets here.