Arnold Clark has posted pre-tax profits of £73.9 million for the year ending December 31, 2009, an increase of £37.7m in comparison to 2008.
The increased profits come despite a drop in turnover by 3.2% to £2.14 billion, new car sales down 4.7% to 75,390 and used car sales down by 6.6% to 118,817 units.
The group reported net assets were up 14% to £413m.
Sir Arnold Clark, chairman and chief executive of Arnold Clark Automobiles, said: “I am delighted to be able to announce a strong set of results for 2009 which proved to be one of the most unusual and unpredictable years the motor industry has ever experienced.
“The global economy suffered near meltdown during 2008, impacting on almost every sector and demand in the wider economy was sluggish due to lack of consumer confidence and restrictions on availability of retail finance. These macro economic factors continued to impact on the retail environment in 2009 and, consequently, turnover reduced by 3.2% to £2.14bn.
“Despite this reduction in turnover, appreciating used car values and cost control measures effected by the group led to a substantial increase in operating profit.”
Clark said the results were also buoyed by the Government’s decision to reduce VAT to 15% and the introduction of the scrappage scheme.
He said: “The success of the scrappage scheme meant that vehicles sold with a scrappage allowance accounted for 14.5% of the new vehicle market. Despite the increase in new car units, many part exchange vehicles were effectively scrap and did not, therefore, lead to a supply of retailable part exchange vehicles.
"This factor coupled with vehicle manufacturers reducing and restricting vehicle supply and a lack of activity in the fleet market resulted in a shortage of used cars and a dramatic reversal of the suppressed used car values experienced at the end of 2008. These market conditions prevailed for the majority of 2009, leading to the unprecedented situation of used car values appreciating for nine consecutive months through to September 2009."
Clark believes 2010 will tell a different tale.
He said: “VAT returned to 17.5% on January 1, 2010 with the possibility of further rises soon, the scrappage scheme is now at an end and used car values are following a more typical pattern.
“Notwithstanding the above, I am confident that the group will continue to prosper in 2010. The board will continue to pursue a policy of ensuring that the group remains very well funded, enabling full consideration to be given to any opportunities that arise in the coming year.”