Gates sees mixed fortunes in 2023 with profit fall and revenue rise

Ford dealer Gates Group turned in a mixed performance last year in the face of higher interest rates and the cost-of-living crisis. Pre-tax profits fell -54% to £4.03m on turnover up 7% to £211.4m.

New vehicles sales rose 4% for the year with these compensating for the reduction in volumes of commercial vehicles due to a lack of vehicle supply.

“Aftersales operations continued to perform well, despite persisting difficulties in recruiting and retaining skilled technicians reducing service labour hours but a further 8% on the previous year,” it said in results filed at Companies House.

During the year, the group, which has dealerships in Essex, Hertfordshire and Greater London, sold its freehold property in Bishop’s Stortford, reducing bank debt to below £20m.

It also acquired a leasehold property to facilitate a vehicle preparation centre beside its existing dealership in Stevenage.

It shut its Enfield dealership, migrating the business to its new Waltham Cross location, with an enlarged showroom and new Ford Transit Centre.

The company introduced further increments in pay during the year for staff to assist with higher living costs.

Gates said its financial performance in the first quarter of 2024 was strong, particularly in new vehicles sales which were ahead of expectations.

It flagged up general concerns over electric sales and challenges created by the ZEV Mandate which stipulates that 22% and 10% of car and van sales respectively in 2024 are electric.

“There is much doubt as to how the automotive industry will evolve during the transition to electric vehicles, especially as manufacturers strive to secure market share, to achieve their ZEV legislative targes and Chinese brands enter the UK market.