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Group 1 Automotive reports ‘solidly profitable’ Q1 for UK dealerships

Earl J Hesterberg, Group 1 Automotive

Group 1 Automotive has reported a “solidly profitable” Q1 for its UK car dealerships, despite the impact of COVID-19 ‘Lockdown 3’ showroom closures.

The US-based car retailer reported consolidated total revenues up by 11.9% year-on-year, to $3.0 billion (£2.16bn) in its overall performance as total gross profit increased 17.8%, to $490.7m (£352.6m) during the three month period to March 31.

Group 1 credited growth of its US used car division, and a 20% increase in sales volumes during the period for much of its success.

Its UK operations also gained praise from president and chief executive, Earl J. Hesterberg, however, after like-for-like total gross profit decreased by just 4.1%, to $65.3m (£46.9m), despite the impact of lockdown.

UK revenues decreased 13.4%, to $547.2m (£393.2m).

Hesterberg, said: “I’m extremely proud of our UK team for their performance during the five months from November 5th through early April when our showrooms were closed.

“This resulted in the closure of our physical vehicle sales departments.

“Nevertheless, our UK operation remained solidly profitable for the first quarter, as well as the entire five-month closure period.”

Group 1 Automotive said that its UK retail operations had accounted for 18.3% of its total revenues and 13.5% of total gross profit during Q1.

Its trading update revealed that like-for-like new vehicle revenue had decreased 18.2% in the period, as sales volumes decreased 26.1%, but new vehicle gross profit grew 12.3%, as gross profit per unit increased 51.9%, to $2,260 (£1,624).

Used car revenues decreased by 5.1%, as volumes declined by 10.9% as gross profit per unit decreased 6.4%, to $1,149 (£826).

The group delivered 3.4% increase in aftersales gross profit, however, to $32.0m (£23m) as revenues grew by 3.3%.

F&I gross profit per retail unit decreased 9.1 percent, to $774.

The group said that its selling, general and administrative (SG&A) expenses as a percent of gross profit had decreased 1,800 basis points, to 73.8%, during the period.

Back in February Group 1 boss Hesterberg said that the retail group had been able to overcome “serious challenges presented by Brexit uncertainty in the UK” in 2019 thanks to its “powerful US performance” in 2020.

He made the comments as the group reported record full-year results that showed a 3.8% increase in turnover to a record $12 billion (£9.3bn) as total gross profit grew 5.3% (6.2 percent), to a record $1.8bn (£1.4bn).

In the UK, the group enjoyed its first full year of trading since the opening of a flagship Beadles Jaguar Land Rover (JLR) dealership in North West London.

It was also the first full year from five Volkswagen car and van franchises – in Chelmsford, Colchester, Romford and Southend – acquired from Inchcape.

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