Eastern Western Motor Group has reported a near-33% rise in pre-tax profits in a set of 2020 annual financial results which lay bare the impact of the COVID-19 pandemic on its trading activity.
The Edinburgh-based AM100 car retail group’s results show an increased profit before tax figure of £15.8 million (2019: £11.9m) despite a 14.1% decline in revenues from £774m to £665m during the period to December 31, 2020.
But, after taking measures to reduce overheads and maintain the financial security of the group, it has managed to expand in 2021 with the May acquisition of the Alex F. Noble and Sons dealer group.
The acquisition maintains the group’s Nissan representation at five sites, following the closure of its Perth dealership, it said.
New car sales declined by 21% as COVID-10 lockdown closures stalled trading across the group’s 27 franchised sites, but profitability from used cars remained strong, Eastern Western said.
Laying bare the impact of the COVID-19 pandemic, Eastern Western’s annual financial results revealed that 80% (1,300) of staff were immediately furloughed following the announcement of the first lockdown on March 24 last year.
The group topped-up employee wages to 100% for the entirety of 2020, however.
During the first COVID-19 lockdown – from March to the end of May – the group suffered a year-on-year loss of pre-tax profits amounting to over £8m.
Eastern Western reported that it sold 8,000 fewer new and used cars between March and the end of June as aftersales lost 100,000 labour hours and over £7m in parts sales.
But the group’s results statement revealed: “Whilst vehicle sales numbers declined, we were able to deliver a similar result to the previous year in used car profitability due to improve retained margin margins, even with an 11% decrease in sales volumes.
“This, combined with tighter control of overheads, produced a 10% increase in profitability within the sales departments.”
The board added: “Overall the directors are satisfied with the group performance for 2020 and are extremely grateful for the huge effort and commitment demonstrated by all our staff during this unprecedented time.
Eastern Western Motor Group currently operates 27 new car franchised sites with OEM Partners Mercedes-Benz (3), BMW (2), Mini (2), Lexus (2), Toyota (3), Volkswagen (4), Mazda (2), Nissan (5) and Honda (3).
It also has one Mercedes-Benz Commercial Vehicles dealership, a Harley-Davidson retail outlet, and an accident repair centre.