Ford franchisee Pertwee & Back has suffered a 43.4% decline in turnover as it slipped into loss following a decision to improve profitability by placing a “greater emphasis on higher margin retail sales”.
The Great Yarmouth-based two site franchised retailer revealed in annual accounts for the 12 months to October 31, 2018, that its turnover in the period had fallen from £33.68m in 2017 to £19.05m last year as a profit before tax of £682,693 fell to a pre-tax loss of £119,110.
Despite the faltering financial performance, the company said in a statement that it was “satisfied with the performance” in a challenging market and also awarded its top-paid director what the Eastern Daily Press newspaper reported as “an inflation busting pay hike”, increasing their salary to over £145,000.
In an annual financial statement, Pertwee & Back said: “Turnover in 2018 decreased by £14,624,412 from a total of £33,677,302 in 2017. This is a consequence of the directors’ decision taken to reduce the less profitable fleet business.
“As a result of that decision the gross profit margin for the year increased from 2.1% in 2017 to 2.4% in 2018.”
It added: “At the balance sheet date the company remains in a strong position with net assets of £3,870,938.”
Pertwee & Back's latest set of financial results come 16 months after the business said that its focus on retail new car sales had helped it return to profitability.
Its Ford dealerships in Great Yarmouth and Gorleston suffered a £17,382 loss in 2016 but was able to report a profit before tax of £682,693 in the year to October 31, 2017 as its gross profit margin rose from 1.7% to 2.1%.
In its latest results statement, the group said that Brexit negotiations had played a key part in the disruption of its cash flow during the reported period to the end of October, 2018.
While it said that retail sales of new and used vehicles “had been satisfactory”, however, it said that impending changes to the Ford parts business have introduced some uncertainties.
Ford of Britain is currently rolling out its Parts Plus network in the UK, with various franchisees taking responsibility for the new wholesale parts franchises.
Pertwee & Back highlighted in its annual accounts that the company currently operates various franchise agreements for Ford, adding that “the loss of any of these could have an impact on the business.”