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John Clark Motor Group targets expansion after 5.5% turnover growth

John Clark Motor Group chairman and managing director John Clark (left) alongside group managing director Chris Clark

John Clark Motor Group has reported a 5.5% increase in turnover during its financial year to December 31, 2017, ahead of the publication of its full financial results.

Publishing a set of highlights from its annual results for last year, the group said in a statement that it had maintained its position as the third largest such business in Scotland, while strengthening its ranking within the AM100, having seen turnover “more than double in the last six years”.

During 2017, the group’s turnover grew by 5.5% to £742m (2016: £703m) as profit before tax accounted for 0.95% of sales (around £7m) to remain “in-line with the UK motor trade national average”. 

However, the group said that EBITDA had decreased to £15.3m, down from the 2016 value of £15.9m, as a commercial property rates revaluation, the introduction of the Apprenticeship Levy and the removal of the cap on fees charged to businesses for customer payments via credit cards contributed to additional full-year extra costs approaching £1 million.

Group managing director, Chris Clark, said: “Early 2017 saw encouraging trading results. However, the latter months of the year saw marketplace challenges caused by economic and political uncertainty which led to reduced consumer confidence to spend. 

“Most franchised dealer networks saw the operating profits of the majority of their dealerships under sustained pressure, against a background of challenges caused by high new vehicle sales targets, high new and self-registered vehicle stocks and resultant increases in interest charges.

“Against this backdrop it is pleasing to again report record turnover, with vehicle sales and aftersales growth ahead of the Scottish market, seeing our market share improve again in both areas.

“Our customer base has never been bigger, and we are servicing it better than ever before from our expanded network of dealerships.”

John Clark Motor Group reported that its vehicle sales volumes had reached a record high of 28,200 (2016: 27,165) despite last year’s challenging market, thanks to the growth of its used car offering.

New vehicle sales fell by 4% to 13,613 units, as the Scottish market saw new car registrations declined by 8%, but used vehicle sales grew by 12% to 14,587 units.

For a twelfth consecutive year, the group also achieved turnover growth across each of the service workshops, accident repair centres and parts operations, including a 12% increase in workshop technician hours sold, the group said.

Staff headcount rose by 5% to 1,262 (2016: 1,206), meanwhile, following the November 2017 acquisition of the Jaguar, Land Rover and Seat franchises in Stirling. 2018 sees the addition of the Volvo Cars franchise, in Edinburgh & Dundee.

Several dealership facility upgrade projects were also progressed.

Group chairman, John Clark, said: “In late 2017 we expanded via acquisition through the purchase of both Morrisons Garage Limited and Morrisons (Land Rover) Limited.

“Throughout 2018 our investment in staff and premises via further acquisitions continues. We were delighted to add Volvo Cars to the groups brand portfolio opening our first dealership in Edinburgh in February and our second in Dundee during early summer.

“During 2017 our most noticeable property investments were seen across our Jaguar Land Rover division with a new state of the art dealership opened in the East of Edinburgh at Fort Kinnaird, the progression of the same in Dundee, which is set to open on October 1, 2018, and the redevelopment of Land Rover Elgin, which was completed in August.

“Further developments are planned for 2018 including the build of an all new facility for BMW, MINI and BMW Motorrad in Dundee, and showroom redevelopments for Skoda, Seat and Volvo in the same city.

“Further South, plans are underway on the refurbishment of the Volvo showroom in Edinburgh.” 

John Clark said that while he recognised that the wider outlook for 2018 was one of ongoing political uncertainty with a stable but fragile economy, the group’s mid-year management accounts showed 10% further growth. 

He added: “Looking ahead, in what is likely to be a period of further consolidation within the motor trade dealer networks, our finances are in good shape, to allow us to not just face up to the added uncertainty of post Brexit Britain but to grow through it and again pursue further select expansion opportunities.”

 

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