Johnsons Cars will continue to target growth through acquisitions after posting an 86.3% pre-tax profits decline in its annual financial results for 2019.
The Redditch-based AM100 car retail group saw its profit before tax total reach £632,000 (2018: £4.6m) in the period to December 31, 2019, while its revenues rose by 5.7% to £457.2 million (2018: £432.4m).
A blow dealt by COVID-19 during the first half of 2020 dealt a further £4.8m blow to the operation, its report shows.
Johnsons said that it had seen a 3% decline in new car registrations with its franchised partners during its 2019 reported period and while used car volumes rose 18% margins had slipped by 15% in real terms last year.
The group’s financial report stated that its November 2019 acquisition of four of Sytner Group’s Goodman Retail division Volkswagen dealerships – in Liverpool, Warrington, Stafford and Stoke-On-Trent – for £7.2m had delivered losses of £392,000 in what remained of the year.
The group also closed its Honda Beaconsfield franchise during the reported period - amid the Japanese OEM’s network consolidation plans - and closed and disposed of a VW aftersales site in Willenhall for £650,000.
However, growth plans continue to be a focus for Johnsons Cars and it said: “The group continues with its policy of expansion and is currently exploring a number of acquisitions and investment opportunities.”
The group’s growth aspirations come after a stronger than expected recovery from the impact of COVID-19 in H1.
Johnsons Cars’ financial statement said: "The financial effect of the lockdown from March to the end of June was a £4.8m adverse variance to our internal plans set at the beginning of the year.
"Our financial performance since the end of June has been well ahead of our original budgets and our reforecasts.
"Cash flows were very positive in the lockdown period as the working capital reduced dramatically, putting the company in a very positive cash position.
"The directors are certain that their handling of the crisis since March until today has been handled in a thoughtful, professional and considered way to ensure the survival of the company for the betterment of all stakeholders in the business."
Johnsons operates dealerships across the South of England, West Midlands and North West, selling vehicles from the Volkswagen, Fiat, Honda, Hyundai, Lexus, Seat, Skoda, Mazda, Toyota, Volvo, Alfa Romeo, Ford and Abarth brands.
The company's dealerships include sites in Solihull, Sutton Coldfield, Birmingham, Tamworth, Willenhall, Liverpool, Oxford, Slough, Milton Keynes, Slough, Coventry, Swindon, Southport, the Wirral and Gloucester.