Squeezed margins drive profits down as car dealer's sales hold up

Squeezed margins drive profits down as JCT600's sales hold up

24/04/2012 in News, All News, Dealer News

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Squeezed margins drive profits down as JCT600's sales hold up

AM100 dealer group JCT600 recorded a 1.3% lift in revenues to £623m in 2011, its annual results issued today reveal.

Pre-tax profit on ordinary activities dropped to £8.5m from £12.3m following significant investment in the business and squeezed margins in the difficult trading conditions.

The family-owned Yorkshire-based motor retailer increased its new car volumes by 1.3% and used car volumes by 4% during the year, against nationally declining markets.

Service revenues also grew by 1.1%, and its leasing division, JCT600 Contracts, also grew vehicle sales by 1.3%.

JCT600 group chief executive John Tordoff said extraordinary capital investments including £330,000 in solar panel technology for power generation, £5m in additional lease vehicle stocks to support the expansion of the JCT600 Contracts business, and £2.3m in the property estate and IT systems pegged back the level of profitability, but are expected to deliver increased returns and cost savings over future years.

“We have seen margins hit with the cost of manufacturing, fuel and other overheads rising at the same time as we are feeling the impact of customers having less money in their pockets. However, overall we are pleased that our positioning and strategy has protected our turnover and returned a healthy profit after increased investment in staff training and IT systems that will benefit the business in the future,” said Tordoff.

“We remain alert to increasingly tight margins in the sector with rising vehicle costs and a fairly static level of consumer confidence suppressed spending power.

"We, like many other businesses in a variety of sectors, continue to work harder and operate in a more efficient way, but we maintain a focus on future strategy and investment in our core asset, our remarkable workforce.”

JCT600 historic financial results to 2010 (JCT600 in yellow, AM100 in black). Source: AMi

 


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JCT600

2010 proved a record year for this proudly family, firmly Yorkshire based group.

It recorded the highest turnover in its 65 year history: £615 million from £498m the previous year. Profit before tax also increased to £12.3m.

It now believes 2011 will be another record year with sales to the end of August already more than 1,000 cars higher than over the same period in 2010.

The group, one of the largest privately owned independent motor groups in the UK, employs 1,350 staff at its 48 dealerships throughout Yorkshire, Derbyshire, Lincolnshire and the North East. JCT600 represents 22 franchises.

It also has a car supermarket brand PriceRight with its first solus site opening at Rawdon, near Bradford, at the end of 2010 with a stock of around 120 cars.

PriceRight has also been integrated into used car operations at a handful of low market share outlets, helping to establish these as all-makes used car specialists.

Current chief executive John Tordoff is grandson of Edward Tordoff who founded the business in 1946 and son of Jack Tordoff who ran the company for more than 44 years until he became chairman in 2002.

JCT600 takes its name from Jack Tordoff's Mercedes-Benz 600 personalised number plate.

Read more

Turnover

turnover

Profit before tax

profit guide

Gearing

gearing guide

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