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Peoples Group doubles profit

Peoples Group has doubled its profits just two years after an accountancy error caused it to write off £4.4m, wiping out its profits in 2003.

In the year to July 2005, Peoples posted a pre-tax profit of £1.2m, up from £506,931 in 2005, on turnover of £142.95m, down 5.2% from £150.79m. The dip in revenues was a result of Peoples scaling back its high value, low margin activities.

This is reflected in the group’s profits, which saw preference share dividends increasing by 137%. Pre-tax profits after share dividends is £865,330.

Peoples no longer has a requirement to repurchase vehicles under the Motability scheme, which reduces its current assets by £14.5m, current liabilities by £4.8m and creditors due after more than one year by £9.7m. Net debt has fallen by £1.4m, a £12.9m drop over the past three years.

Brian Gilda, Peoples chairman and managing director, says: “The business is back on track. We have changed some processes but we still have a lot to do to improve our figures.”

Gilda is putting more emphasis on aftersales and used cars to offset the continuing difficulties in the new car market, expected to fall again this year.

“These are the bits I can control,” he says. “Success in the used car market is the right people, the right model mix and the right marketing. Last year we were out of whack on people and stock mix, and that made the job more difficult.”

Peoples, a founder member of the Retail Automotive Alliance, has six Ford dealerships – three in Scotland and three in Liverpool – one of which is dual-franchised with Mazda. It is considering further growth with existing and new franchises.

“We get a phone call every month from a dealer looking to sell – some names are well known, others aren’t,” says Gilda, who last year was forced to reject speculation that his group was up for sale. “We are looking at something new – but it has to have a sustainable market place for new and used cars.”

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