The company has announced several measures in an attempt to turn the situation around but says it does not expect much improvement in 2005.
“Since the half-year, Yes Car’s sales volumes have fallen by 16%, compared with a 9% fall in the market as a whole,” says a trading update issued by parent company Provident Finance in December.
“This performance was well below our expectations and only achieved with increased advertising costs and an increased branch network of 29 branches. The combination of reduced year-on-year sales volumes, together with increased advertising and branch costs, has resulted in the business trading at or around break even since the half-year.”
Yes Car Credit specialises in supplying two- to four-year-old cars to customers with a poor credit history. In 2003 it made a pre-tax profit of £11.3m on 40,000 sales and had a turnover £260m.
In July 2004 the company told AM it was in advanced negotiations to open two more sites, only one of which actually opened, in Norwich, Norfolk.
“While we are working hard to improve the business we expect this will take time to have an effect and so the profits for 2004 and 2005 are likely to be below market expectations,” the company says.