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John Clark Motor Group expects to report 'significant' 2020 profit growth

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

John Clark Motor Group has said that it expects to report profitability “significantly ahead” of its previous year in 2020 after recovering from H1's COVID-19 coronavirus lockdown with a “strong trading” performance.

Reporting its annual results for the period to December 31, 2019, the group revealed that its had incurred significant losses in April and May last year, but expected to be able to report improved profitability after bouncing back from June onwards.

Managing director, Chris Clark, said: “Our September 2020 YTD management accounts saw cumulative profits which were ahead of the 2019 comparative despite the three-month lockdown.

“October and November have seen this gain extended, so the directors are predicting full-year 2020 results where turnover falls but net profits will be significantly ahead of the 2019 result.”  

The Aberdeen-based AM100 car retail group cited the impact of a costly used car values readjustment and vehicle supply shortages resulting from new emissions legislation for a 19.7% 2019 pre-tax profit decline.

It reported that it had been had been “pleasing to report” that the group had  been able to “broadly” hold its turnover £820.8m (2018: £823.6m) against the backdrop of a 2019 market which saw 36% of the AM100 deliver a reduced figure.

And despite market headwinds which contributed to a decline of 19.7%, the business was able to maintain pre-tax profits of £2.61m during the period.

Exceptional challenges

In his results statement, group managing director, Chris Clark, said: “Our 2019 trading performance saw some exceptional challenges which were not within the group’s control, especially in the second quarter when a market-wide realignment on used car prices saw unexpected losses on part-exchange stock and disposals.”

Clark added that the group’s H2 2019 performance, meanwhile, had been restricted by emissions legislation change driven manufacturer actions on new vehicle product supply, particularly among its Volkswagen Group partners.

It said that the results from its BMW operations also deteriorated during the trading period.

Despite the issues, John Clark’s new vehicle sales grew by 1%, to 14,167, during the period, with retail used car sales growing by 2% to 16,333.

For a 14th consecutive year the group also achieved turnover growth in its aftersales operations, it said.

2020 developments

In post year-end observations, the Clark acknowledged the impact of the COVID-19 coronavirus pandemic

Despite the pandemic, however, the business was able to relocate its BMW dealership in Dundee to new premises, with development of its Mini and Volvo dealerships inj the city also expected this year.

Volvo Edinburgh will be relocated in 2021 toi what the group referred to as a freehold site on a “prestige franchise motor park location”

Land Rover Cupar was closed following the expiry of its dealership lease as part of a process which also brought together separate Jaguar and Land Rover dealerships in Perth.

John Clark also relinquished its franchise with Seat in Stirling as part of an expansion of its Motorchoice used car retail operation into five separate locations in Aberdeen, Dundee, Edinburgh, Perth and Stirling.

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