“The group has stood still in a tough market,” says one. “It should have made acquisitions to replace the Mercedes dealerships it has lost.
“Jacks does not have the critical mass to justify the cost of its infrastructure. It is relying on a lower head count to reduce outgoings and has probably executed that too late.”
Another analyst says: “The group should be doing well with Honda and Volvo, but Jaguar is causing problems and BMW/Mini is not producing the same return as in the past.”
It’s half-year loss is blamed on the slump in margins and retail sales. It made a £825,000 loss in the six months to July 31, compared with a £250,000 profit at the same point in 2004.
John Adair, chief executive, was on holiday and no other director wanted to comment on the £1m financial reversal. William Jacks will not appoint a replacement when Adair retires in April – his duties will be shared between Mike Dodds, managing director, and Andrew Dick, finance director.
Jacks has made 60 staff redundant (an annual £1.5m saving) and will raise £2.5m by selling its Brighton Volvo dealership to a Channel Islands property fund, and leasing it back.