Motor Trader The award-winning and longest running UK magazine for car retailing professionals. Your first stop for News, Jobs and Reports for the motor industry.
The franchised dealer sector has collectively returned to profit, according to a new piece of research by BDO, the accountancy and business management company.
The newly published Motor 150 Report analyses the financial results of the biggest 150 groups by turnover and produced a aggregated financial report complete with consolidated accounts.
All the financials are based on the most recent year-ends which covered the pivotal 2009 financial year.
The research highlights the resilience of the sector during 2009; the toughest year it has faced in a generation. The collective turnover of these groups totalled £34.6bn, down 4.2 per cent from 2008’s £36.1bn. But, with the sector stripping out costs as the downturn began to bite, the bottom line saw profits of £360m after losses of £198m in 2008.
“It’s a big turnaround in anyone’s eyes and especially so for a highly competitive market where profit margins are traditionally tight,” said Malcolm Thixton, BDO’s head of motor retail.
Return on sales for the Motor 150 reached 1.04 per cent compared to a loss of 0.55 per cent in 2008.
“It may not look like much of a change in fortunes in mathematical terms, but it represented a huge surprise in economic terms for the sector,” he said.
The report suggests many groups are in a good financial position to grow by acquisition.
“Stronger companies are now confident enough to capitalise on opportunities in the post-recession market, either to gain strategic acquisitions or quickly increase market share,” said Thixton.
Click here to download the full report.