The Aberdeen-based company posted a pre-tax surplus of £229,670 in calendar 2004, against with a deficit of £1.2m in the previous 12 months. Sales increased to £182m from £139m in the prior period.
The 2003 trading deficit was made worse, the company said, by a ‘serious breakdown in accounting systems and control’ at an unnamed subsidiary. This led to a ‘one-off’ write-off of £624,375, reflecting potentially non-recoverable assets and previously unrecorded liabilities.
John Clark, group chairman and chief executive wrote in the group’s annual report: “BMW and Audi dealerships performed satisfactorily in the year, while Land Rover in Edinburgh also made a positive contribution.”
However losses were made at the group's Volkswagen dealerships and in commercial vehicle operations.
He added: "Volume growth was significant in both new and used cars, however margins remained under extreme pressure in all franchises."
Commenting on current trading, Clark added: "Although the new car market for the 10 months to October 2005 is down – some 15% in the areas in which the group operate – 2005 is shaping up well and the group's results are again forecast to show significant improvement.
He added: "Our ethos has always been to build our business by taking a medium to long-term view, building relationships with particular manufacturers and investing for the future. We are planning further expansion as we move from 2005 to 2006."
Clark stressed that group accountancy procedures have been reviewed and strengthened since 2003. He is also restructuring the group's property portfolio in order to cut interest costs, which climbed to £1.6m last year from £1.2m in 2003.
(Source: The Herald)