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Perrys Group cites ‘cost pressures’ as pre-tax profits fall 65.7%

Perrys Group FordStore, Chesterfield

Perrys Group has blamed cost pressures including the apprenticeship levy, pension costs and a higher minimum wage for a set of 2017 annual financial results which showed a 65.7% decline in profit before tax.

The Northampton-based retailer – number 26 in the 2018 AM100 rankings – saw 2016’s record turnover of £661.4m decline 4.7% to £633.3m for the period to December 31, 2017, as profit before tax fell from £16.6m to £5.7m.

Marking a turnaround in fortunes since last year’s record results were delivered in the first full year after the August 2016 acquisition of seven dealership sites from GK Group, the 2017 financial results were included a directors statement which revealed the business was “pleased” with its performance.

During 2017, the group sold 46,159 vehicles compared to 51,230 in 2016, but as volumes and turnover faltered, margins improved from 15.5% to 15.7% year-on-year, it stated.

The group said that it was seeing strong demand for its parts and aftersales departments, also, but added: “We are facing constant cost pressures which are impacting on profitability.

“The apprenticeship levy, increased pension costs, and higher minimum wage are all increasing our cost base.

“Despite this, aftersales remains an opportunity for the group as we develop wholesale parts business and continue to grow mechanical service by delivering high standards of customer service.”

During the reporting period long-time chairman Ken Savage relinquished his seat at the head of the business, Richard Ingram taking up the post at the turn of the year.

The group, which now operates 45 franchised outlets from 25 sites across the UK completed the 40-week development of a flagship FordStore facility in Chesterfield, which includes the group’s new ‘Quick Lane’ fast-fit MOT and servicing centre, which is open seven-days-a-week.

In its annual financial results, Perrys revealed that it was also set to open a new Seat franchise for Blackburn and Bolton, Ford at Dover and Mazda at Canterbury through the remainder of 2018 and into 2019.

During the 2017 reporting period the group also exercised a policy of writing back its balances in dormant companies to zero and also investing in freehold property.

It said in its statement that both Nelson Citroen and Blackburn Mazda sites had been acquired, adding: “The directors consider that owning the freeholds give certainty over the future of the dealership locations and creates shareholder value.” 

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