Announcing the group’s preliminary results for the year to January 31, 2005, chairman Dato’ Tan Kay Hock warns of the industry’s declining sales in the coming year. “A recovery in new car volume is critical to achieving a satisfactory performance this year,” he adds.
The group has already had to fight a declining market in recent months. “After a satisfactory first half, the final few months of our financial year were difficult. The new car market unexpectedly deteriorated, particularly in the private sector, and by January 2005 new car purchases were over 20% down on the prior year,” says Hock.
However he sees the arrival of key new vehicles, such as the Range Rover Sport, Jaguar XJ diesel and BMW 3-series as providing opportunities for increasing sales this year.
In addition, he sees further scope for growth in corporate sales, now accounting for 53% of the group’s new car market. “Since the beginning of 2005, we have been successful with two significant tenders where we have secured two-year supply contracts for several of our franchises,” he adds.
While turnover from the group’s continuing operations rose to £182.4m from £158.7m in the previous year, operating profit also increased year on year to £982,000 from £733,000.
The group’s coffers were also boosted by the settlement of its outstanding claim for overpaid VAT of £809,000 plus £778,000 interest.