JB: It’s very easy to say you had some problems and you solved them, but to improve performance so much is more than just righting a wobbly ship.
BG: You must remember the profit before tax we had in 2010 of £3m was an exceptional year brought about because of scrappage. But our profits have been ranging between £1.4m and £1.6m so the move to £3m looks stratospheric.
The intention was to make sure we had the right level of people, businesses and share of the market place.
We jettisoned that part of the business which was high usage of cash and low returns – mostly our high-level business-to-business, heavy fleet business – concentrated on our retail, we reconfigured our advertising and marketing and eventually we became the model we are now that works.
JB: And similarly with gearing?
BG: Well, we just sold a business. We did the same as Mullally did: ie sold the furniture to make sure we had enough cash for research and development work.
We sold what we didn’t need. We wanted to bring our gearing down as we wanted to have enough cash to do the things we wanted to do.
JB: What do you see happening in the rest of the year?
BG: We’re probably not in the same place we were in January. The feel-good factor is a bit stronger.
We have to make sure our business is holistic. So I need to continue to get my 66% operating profit through my aftersales activity as my vehicle sales department is always going to be volatile to some degree.
I sense the economy is starting to shift positively a little bit, that consumers are feeling a little bit more relaxed. The part that is out of my control is the ferocious level of competition to sell the next car, making margins so skinny.
JB: What do you mean by ferocious competition?
BG: Well, the illogical competition pricing. It’s partially down to chasing an objective or a reduction in stock. We always see it at the end of a quarter, mainly in March and September, in an attempt to take all the prizes.
JB: Is there a level, a margin, you will not go below?
BG: You have to say eventually no further. One of my businesses up north went to the ‘no further’ mark during March.
JB: Do you see the group growing within the two geographical areas or moving beyond them?
BG: There are always going to be opportunities. That’s the nature of the world. People want to retire if it gets too difficult; they’re under stress from the bank.
We have completely the opposite to that; our bank is really supportive and keen for us to do more, if we can find the right locations and we can manage them. Finding the money isn’t the tough bit.
JB: So will the opportunities be new build or acquisitions?
BG: I wouldn’t want to do a new build because that’s probably the most difficult to get right. Trying to turn a business round is the best proposition.