Arnold Clark’s pre-tax profit increased by 6.5% as group turnover rose by 7.8% during 2018 after growth in used car sales volumes helped to counteract the effects of a decline car retail market.
The Glasgow-based AM100 car retail group reported in its annual accounts to December 31, 2018, that that its profit before tax had risen by £6.9m to £113.5m as turnover grew by around £307m to deliver an overall turnover figure of £4.24bn.
The group outperformed the 2018 new car market volumes – as reported by the Society of Motor Manufacturers and Traders (SMMT) – but still suffered a 2.6% year-on-year decline to 68,344 sales.
Arnold Clark also experience a 6.9% decrease in revenues for its Arnold Clark Finance Limited business, with overall takings amounting to £506.7m as pre-tax profits declined from £9.7m to £9m during the year.
However, the business was able to embrace the used car market and delivered a 9.5% growth in sales volume to 238,997.
The group said that significant investment in its Arnold Buys Your Car (ABYC) consumer-facing stock acquisition platform had helped to deliver the positive used car performance.
Commenting in its results statement, Arnold Clark chief executive, Eddie Hawthorne added: “As a result of a continued focus on operational efficiency, we have been able to achieve improved vehicle margins, resulting in an increased operating profit to £125.5m.”
Arnold Clark has also invested heavily in its Motorstore used car centres as part of its drive towards sales volume success.
In October the group opened a dedicated preparation centre for used cars in Ayr, which will be rolled out to other centres.
Hawthorne said: “We invest significant resources into bringing newly-acquired used vehicles up to the high quality standard we require before displaying for retail sale.
“As part of our ongoing drive for operational efficiency we have piloted a new process for this and in October opened a dedicated preparation centre in Ayr to provide this service to our branches in the area.
“This solution will be rolled out to other suitable locations throughout the group in in due course.”
During 2018, Arnold Clark also expanded through acquisitions, with Kilmarnock Citroen brought out of administration.
It acquired Crossflags (Motors) Limited in Dumfries two premium vehicle dealerships in Dumfries as part of its acquisition of that business and completed the acquisition of Paisley-based Phoenix Car Company after the end of the reporting period, in January, 2019.
Hawthorne took the opportunity to celebrate Arnold Clark’s AM Awards success in his annual results statement, stating that the five awards won by the group in 2019 had been capped by the “the prestigious headline award of dealer group of the year.”
Looking forward to the group’s future trading he acknowledged that “market conditions continue to be challenging”.
He said: “We have made a strong start to 2019 by focussing on having the right product mix to meet the needs of our customers, ensuring a continued emphasis on delivering an exceptional customer experience and offering genuine value for money.”