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CD Bramall looking to buy more specialist outlets

CD Bramall is to add to the three Land Rover outlets acquired in January, which took the network to 77 dealerships.

Chief executive Peter Jones said: “We remain acquisitive and will announce several smaller acquisitions over the next few months.

“Growth has tended to be through group acquisitions – this remains a possibility – but the business must be a good fit.”

Mr Jones said the balance sheet was “holding up” for future purchases, after a strong start to 2001, and would focus on “strengthening the specialist dealer network”, which includes BMW and DaimlerChrysler.

“We will also be looking to grow with key partners, including General Motors, marques within Ford Premier Automotive Group, Volkswagen/Audi and Toyota,” he added.

Last year had been “one of the most difficult” trading periods, but CD Bramall had “performed creditably, standing up well against our peers”, said Mr Jones.

Turnover dipped 0.5% on 1999, to £839.3m, while pre-tax profits fell from £17.3m to £16.03m, despite new car sales up 7.8% to 27,566. Used cars suffered, falling 4% to 22,449 units.

CD Bramall chairman Tony Bramall said: “The business was beset by a number of adverse issues that affected most of the year but were particularly pronounced during the second half.”

Mr Bramall blamed the Government inquiry into car prices for persuading retail buyers to defer purchases and, in some instances, buy vehicle imports.

He also attacked manufacturers for not meeting Trade Secretary Stephen Byers' Order for fleet-type discounts to be made available.

“While manufacturers have indicated the revised terms available in response to the Order, we feel these terms do not meet those that are being offered to the fleet marketplace,” he said.

“I believe that manufacturers should still be more transparent in their pricing policy and this would help to further regain consumer confidence which, over the past two months, is showing signs of returning.”

Mr Jones said the aftersales division had been “the rock of the business” last year, increasing group profits by 4.7%.

Dealers were benefiting from consolidation and the results of targeted marketing to owners of cars more than three years' old.

“This year we also expect to benefit from manufacturers' moves to three-year warranties. Despite the trendfor extended servicing schedules, aftersales should continue to improve.”

Rising internet activity has encouraged CD Bramall to revamp its website, though expenditure presently outweighs revenue generated. The website is achieving 8,000 to 9,000 user sessions a month, and has sold “some 650 cars, the majority of which were used” since launch 12 months ago.

The new site, trading from next month, adds full online transaction capability for new and used cars, finance and insurance facilities, aftersales booking and trade-ins.

Mr Jones said: “We believe the vast majority of our business will still be through the traditional channels, but we have to offer an online alternative. This second generation website will bring us up to speed with high-tech functionality.”

The group had resisted 'several approaches' from dotcom operators who were looking for fulfilment providers to add credibility to their businesses.

“The dotcoms came to prominence on the back of European pricing discrepancies, but many have ceased to exist and the others are looking for UK dealers to operate as fulfilment partners,” said Mr Jones.

“We have not yet decided to become one, but are leaving our options open.”

CD Bramall, like other dealer groups, has been forced to make a one-off exceptional provision to cover falling residuals for Motability and contract hire terminations.

The provision, £1.85m, would “offset future losses”, said Mr Jones, who admitted the Motability scheme had proved to be “a headache”.

He added: “The scheme has been changed and, from 2002, the liability will mostly lie with the manufacturers. We are happy to continue taking Motability sales.”

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