Inchcape Retail saw its pre-tax profit soar by a staggering 328% to £27.8m in 2022 from £6.5m the year before.
Its newly published accounts also show that turnover for the year ended December 31, 2022 rose by 10.2% from £1.329bn to £1.465bn
The new and used dealer group, which has more than 100 showrooms across the UK and is part of the Inchcape Group, said the profit rise was mainly driven by an increase in the number of vehicles sold, enhanced used vehicle margins and the reduction of investments reported in 2021.
Buying the Cooper Group in 2021, a general increase in unit sales, plus the introduction of more Bravoauto used vehicle trading sites helped boost its turnover, said the company – ranked 43rd in the latest Car Dealer Top 100 of the UK’s most profitable dealerships.
Its gross profit margin went up from 12.6% to 13.3% thanks to enhanced used car margins caused by supply constraints across the market that limited availability of new and used vehicles.
In the accompanying strategic report, signed on behalf of the board by director Katie Martin-Hickey, Inchcape Retail said: ‘Despite the challenges caused by both the pandemic and supply constraints, the company’s performance was strong, resulting in an improvement in profitability.
‘The global shortage ofsemiconductors had an impact on the company’s performance, as it has directly affected the post-pandemic recovery of manufacturers.
‘The inability to secure supply in order to match market demand has held back the company’s performance, but combined with proactive management of appropriate discounts and product mix, [it] led to better margins on vehicle sales.’
It added: ‘Demand for vehicles remains high however. Constraints have continued into 2023 and recovery is not expected until early 2024.
‘Despite this challenge, the company has made significant developments to improve the business for the future, including significantly enhancing the company’s digital trading capabilities as well as streamlining back-office processes.
‘Consequently, the company is well placed to continue its recoverability from the pandemic and able to adapt and respond to challenges affecting the industry as they arise.’
The directors’ remuneration for 2022 was £1.525m – down from £1.603m the year before. They were listed as George Ashford, Katie Martin-Hickey and Martin Wheatley, who resigned on June 30, 2022.
James Brearley was listed as having resigned on December 13, 2021. He went on to join Peter Vardy as its chief operating officer earlier this year.
The directors didn’t recommend paying a final dividend for the current year, having not paid one in 2021 either.
Looking ahead, the board said: ‘We expect the company to continue to make good progress with its strategic priorities in 2023 and do not foresee any significant changes in the company or its activities during 2023.’
It added: ‘The company’s 2023 performance up to the date of signing these financial statements [on November 27, 2023] was ahead of its forecasts, with an increase in profit compared to the same period in 2022.
‘There remains uncertainty around new vehicle supply availability for the remainder of 2023 and the start of 2024. However, to date, this has been offset by an increase in selling prices and improved gross margins of both new and used vehicles.’
Inchcape Retail had 2,877 employees at the end of last year, versus 2,602 the year before.
Pictured via Google Street View is Inchcape’s Toyota dealership in Guildford