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Swansway Group profits flat despite 40% turnover increase in 2017

Swansway Group's Stafford Land Rover dealership

Swansway Group’s 2017 annual financial results have revealed that profits remained flat despite a 40% increase in turnover during the period.

The Crewe-based AM100 franchised dealer group generated revenues of £779.9m (2016: £557.9m) in its first full-year of trading since its acquisition of Thompson Motor Company, crediting the move in December 2016 and the growth of its VW Commercial Vehicles and stand-alone Jaguar and Land Rover dealerships for the increase.

It also delivered a 49% increase in EBITDA over 2016, rising to £12.296m, and reduced its long-term debt by £2.28m in the year, in-line with the Board's planned strategy of reducing debt.

Despite the apparent growth, Swansway’s profit before tax figure for the period to December 31, 2017, reduced marginally (0.8%) from £5.133m to £5.175m, however.

Group director, Peter Smyth said: “We’re going through a period of consolidation following our acquisition of Thompson Motor Company and our joint focus is driving up our profitability and reducing our long term debt.

“Though we know the sector is going through a period of disruption, we believe that there will always be a need for a local, physical destination and we continue to invest in our businesses where we believe we will see an immediate return on that investment.

“We’re investing £700k in a workshop extension at our Stafford Land Rover site, which has been the Land Rover UK Dealership of the Year for two consecutive years.

“Our workshop there is at full capacity and with the increasing Land Rover parc, we expect to see a return on our investment within 12 months”.

Among Swansway’s investments in 2017 came a further £368,000 spend on its Jaguar dealership, £300,000 spent on Swansway Honda Bolton and £718,000 in its Liverpool Volkswagen Van Centre.

The group revealed that it has also completed a revaluation of its Plant and Equipment and Fixtures and Fitting during the year, which has resulted in an increase of £1.16m in the value of these assets.

Following a strategic review the group closed its Honda operation in Manchester, meanwhile.

The volume of new vehicles (Retail and Fleet) sold by the group increased from 13,737 in 2016 to 17,229 in 2017, while used vehicle volumes increased from 10,099 to 12,445.

Administration expenses increased from £22.5m in 2016 to £31.0m in 2017, however, as staff numbers increased from 895 to 1,211.

Smyth said: “So far 2018 has proved to be a good year, though obviously challenging and we look forward to 2019 as it’s our belief that with the franchises we hold and the people we employ, we will continue to prosper”.

“Though we’re not actively seeking to expand, we remain receptive to the right opportunities”.

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