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John Clark Motor Group defies recession with improved profits

The John Clark Motor Group has reported an upturn in its operating profit from £1.8 million to £2.8 million in its latest financial results.

Turnover was maintained at a similar level to 2008 and combined with a significant reduction in interest costs, the group saw a pre-tax profit of £1.7 million compared to a loss of £480,000 in the previous year.

John Clark, chairman and managing director of the John Clark Motor Group, said: “Following a period of expansion and acquisition in 2008, our primary focus through 2009 was to react to the mix of challenges and opportunities that resulted from the recession.

“The unprecedented economic downturn in the second half of 2008 continued into early 2009. We implemented measures aimed at stabilising the group during those difficult times. This meant we were able to minimise an unfortunate but essential reduction in staff numbers.”

Clark said the management teams at group and dealer level responded positively to the challenge of the recession of improving working capital controls and resultant cash liquidity.
He said: “This has been reflected in the lower interest costs during 2009 and the significant reduction in borrowings over the period.”

The John Clark Motor Group reports that its new vehicle sales for 2009 were ahead of budget. But, reflecting the trend in the wider marketplace, sales were 10% down on the record levels it attained in 2007 and 2008. Used vehicle sales during 2009 increased by 12%.

The group didn’t see a massive benefit from the scrappage scheme due to its prestige franchise representation. The VAT reduction to 15% was beneficial for John Clark, but only to a limited extend.

Clark said: “The outlook for the rest of 2010 and into 2011 remains challenging. But, our mid-year results were again ahead of budget. We shall continue to focus strongly on growth in aftersales services, operating cost levels and working capital controls.

“With a stronger balance sheet, thanks to the groups return to profit and the reduction in our borrowings, I believe we are in a good position to take advantage of future opportunities.”

John Clark bought Clark Commercials in Aberdeen in 2008 and the downturn in the commercial vehicle market had been “extremely disappointing”. The group made “significant investment” in light commercials, both in its Aberdeen and at its Volkswagen Van Centre in Edinburgh.

During 2009 the John Clark Motor Group’s BMW dealership in Dundee was refurbished to the latest franchise standards and a new showroom constructed for Mini.

Future developments include expansion with Land Rover in Edinburgh and the group is opening a new Specialist Cars Skoda dealership on Dundee’s Kingsway East.

The John Clark Motor Group is Scotland’s fourth largest motor group with 640 employees. The group represents BMW, Mini and Audi in Aberdeen and Dundee, Volkswagen in Aberdeen and Fife, Skoda and Seat in Aberdeen and Land Rover in Edinburgh. In addition it holds the Volkswagen van franchises in Edinburgh and Aberdeen.

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