Perrys Motor Sales managing director Darren Ardron has expressed his confidence at tackling the car retail sector’s headwinds after the business posted a 275% pre-tax profit rise from “excellent” 2021 trading.
The Northampton-based AM100 car retail group delivered revenues of £600 million – 22% up on the previous year’s £491m – as profit before tax rose to £12m (2020: £3.2m) in a year which started with a third national COVID-19 lockdown and ended with the government introducing new Plan B measures.
Gross margins increased from 13.5% compared to 13.3%, meanwhile.
Perrys also succeeded in generating positive operating cash flows, with net debt reduced from £1.2m to a net cash position of £3.6m.
Ardron said: “2021 was an excellent year for Perrys. We navigated further disruption on new car supply and battled with COVID difficulties throughout most of the year. The result is testament to the hard work and dedication of all our staff.
“We will no doubt face further headwinds in 2022 as cost pressures will be felt in all areas but I am convinced we are well set and resilient enough to cope.
“I would also like to thank our manufacturer partners for their support during this period.”
Perrys said that its strong 2021 financial results had been achieved as a result of prompt and effective management action coupled with the support of all staff.
Ardron discussed the lockdown lessons learned by Perrys, the measures adopted by the group and the current challenges and opportunities presented by a sector battling a reduced supply of new car stock in a recent AM News Show podcast interview.
While he said it felt like the car retail sector was getting “back to reality” in 2022, he also highlighted reasons for optimism.
During its 2021 treading period, Perrys expanded its franchise portfolio with the addition of Mazda in Dover, MG in Aylesbury, Peugeot in Huddersfield and Bury and it opened a new Cupra showroom in Bolton.
An independent valuation of Perry’s property portfolio, performed by Knight Frank LLP, delivered a revised valuation of £77m.
Including this figure in its 2021 accounts resulted in a surplus in carrying value of £11.1m above the book value of £65.9m, Perrys said.
In total, the group net assets increased to £76.6m, up from £57.5m in 2020.
A statement issued by the group said its directors were confident that it is well positioned to deliver a strong result in 2022.
It added: “New car performance continues to be affected by supply issues with a number of manufacturers now pushing deliveries back to the second half of the year. This is also affecting the supply of used vehicles.
“In line with many industries the group faces challenges with recruiting staff, particularly technicians, which is affecting top line service performance.
“The group continues to retain strong margins and is benefitting from cost measures taken in previous years which is delivering a satisfactory bottom-line result.
“It is expected that the first half of the year will continue to be affected by new car supply issues, but the second half is expected to be strong as new vehicles start to arrive in greater volumes and used car supply improves from the receipt of part exchange vehicles.”