HR Owen profits hit by inflationary pressures and higher finance costs

Specialist luxury and sports car retailer HR Owen took a hit in the year to June 2023 with pre-tax profits falling to £7.6m from £15.6m the prior year on turnover up 5.8% to £567.1m.

The group represents Aston Martin, BAC, Bentley, Bugatti, Czinger, Ferrari, Hennessey, Lamborghini, Maserati, Radford, Rimac and Rolls-Royce. It also has a used car business, bodyshop and an insurance brokerage business.

Vehicle sales revenues rose by 7% to £510m despite lower new and used vehicle sales volumes, which fell by 4% to 1,195 and 11% to 1,811 units, respectively, according to results filed at Companies House.

Aftersales revenue was £3.3m lower at £57.3m due to trade disruptions caused by business relocations.

HR Owen said the reasons for the decline in profitability  were increased costs associated with the opening its new Hatfield with, inflationary pressures and raised finance costs due to higher interest base rates.

“Distribution costs and administrative expenses were £5m higher at £59.3m as operations on our new Hatfield site became fully operational.

“This coupled with cost inflationary pressures has driven the increase compared with £53.4m in the prior year.

“Notable increases were due to employment costs, property expenses, marketing, utilities, insurance, professional fees associated with various compliance and fixed assets depreciation.

“Finance costs were significantly higher due to the Bank of England raising bases rates in quick succession from 1.25% to 5% in the financial year.

“The past year has been one of the most challenging but despite this the group delivered an acceptable result.

“We aim to grow our aftersales operation along with pre owned vehicle sales to help mitigate any potential decline in the new vehicle market.

“We continue to expand our operations with existing brand partners in new territories. Our new freehold site at Hatfield acquired in December 2020 is now fully operational is a testament of this.

“The site has five vehicle showrooms, four aftersales facilities, a multi storey car park and corporate headquarters,” it said.