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Arnold Clark maintains a 4% operating profit

Arnold Clark is poised for further growth after reporting a tax-paid profit of more than £50 million and significant increases in turnover and sales of both new and used cars.

The group’s accounts for calendar year 2007 say: “For 2008, we intend to maintain growth through acquisitions and greenfield developments, while ensuring the group is well funded.”

Key financial figures in the results (with 2006 equivalents) are turnover £2.084 billion (£1.873bn, up 11%), new-car sales 73,887 units (66,981, up 10.3%) and used-car sales 120,396 units (112,095, up 7.4%).

Arnold Clark’s group operating profit before goodwill and exceptional items was £86.0m (£78.7m, up 9.3%) and the profit after tax was £51,563,000.

A motor industry consultant said: “Arnold Clark is maintaining an operating profit of a little over 4%. It is a strong business that has grown through its staff following the strong work ethic of its founder.

“The group could increase its profits through a programme of rationalising facilities and eliminating waste – and there is also a case for a major acquisition.

"But it’s hard to argue with the senior management’s policy of dominating Scottish motor retailing, and continuing to give value to its customers.”

Arnold Clark’s report for 2007 says of the increases in turnover and car sales in a difficult market: “They are testament to the success of the continued focus on growth through a combination of acquisitions and organic growth.”

"The £40.7m increase in turnover was generated by a combination of several acquisitions last year and income from the previous network.

"The new dealerships accounted for 2,328 of the new car sales and 683 of the used car sales in the year.

"The higher operating profit was driven primarily from the increase in turnover.”

The results statement describes as “impressive” Arnold Clark Finance’s 5.7% increase in turnover to £132.7m, and its 14.5% rise in profits to £4.0m."

Managing director Eddie Hawthorne said: “We are looking for further growth in England where there are 55 million people, compared with 5m in Scotland.

“Perhaps our greatest advantage is that we do not have outside shareholders making demands on us.

"We want to grow so that we can invest in the business, and I expect opportunities to arise over the next 12 months where dealers do not have someone to take over the business when they finish.

“If it does not happen, we will continue what we do well with what we already have.”

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