Auto Retail Agenda: 3 October 2022
02 October 2022
- AUTO RETAILERS POST GLOWING 2021 RESULTS
- TOP RETAILERS ‘MAKE £700m AND KEEP FURLOUGH FUNDS’
- AUTO TRADER VALUATION DATA NOW FREE FOR ALL RETAILERS
- AUTO RETAIL LIVE TO DISSECT CHINA’S NEW ENTRANTS
- CARMAX: ‘ABSOLUTE DISASTER’
- 3 IN 4 EV BUYERS PREFER RETAILERS
- STOCKWATCH
- COMING UP: Halifax house price index
- HMRC TARGETS RETAILERS WITH ‘UNUSUAL’ VAT WARNING
- HIGH-EARNERS URGED TO CLAIM £5k PENSION RELIEF
Auto retailers post glowing 2021 results
A flurry of auto retailers have posted excellent results for the year ended December 2021.
Glyn Hopkin saw profit before tax grow from £4.8m to £14.1m; a 3.3% margin. Turnover grew from £368m to £452m. An interim dividend of £8.4m was paid, compared to £2m in 2020.
William Morgan posted turnover growth from £178m to £213m, with profit before tax up from £1.6m to £4.3m.
Gillingham’s JCB Medway grew turnover from £154m to £192m. Profit before tax rose from £1.9m to £4.4m, a 2.2% margin.
Yorkshire’s Riverside saw a 24% rise in turnover in the same period, to £190m, with pre-tax profit up from £5.1m to £7m.
Castle Donington’s Available Car grew turnover from £254m to £330m, with profit before tax for the four-site car supermarket rising from £1.2m to £2m, a 0.93% margin.
Top retailers ‘make £700m and keep furlough funds’
The Sunday Times says the UK’s top five auto retailers have collectively made almost £700m in 2021 “but have refused to repay nearly £250m of taxpayer-funded furlough bailouts”.
It highlighted Arnold Clark (£263m profit), Sytner (£178m), Lookers (£90m) and Vertu (£80m) and said that “unlike the vast majority of other retailers, the car dealers have refused to pay a penny back for the support they received during 2020, even though they took advantage of the pandemic to lay off thousands of workers”.
“Furlough money was not profit,” responded one commentator. “It was provided to part-pay staff so that companies wouldn’t make them redundant. I don’t know why a company would pay it back when they’ve avoided shifting people to the welfare system where the taxpayer would end up paying anyway.”
Auto Trader valuation data now free for all retailers
All Auto Trader retailer partners are to enjoy free valuations data through the Auto Trader Connect platform as part of their standard packages, Auto Retail Agenda can reveal. It will be included from April 2023 but early access will be provided from 1 November.
Described as “the industry’s most accurate pricing data,” COO Catherine Faiers described the move as “among the most powerful ways we can help our partners, given the unpredictability of today’s market.
“We know that those businesses that have already enabled Auto Trader Connect are driving better margins, greater efficiencies and an improved consumer experience.”
Auto Trader valuations are calculated from daily pricing analysis of 1.3m vehicles, says the firm, which calls it “the most comprehensive and accurate view of the live retail market”.
Auto Retail Live to dissect China’s new entrants
IM Group MD William Brown, Urban Science MD Chee-Kiang Lim and Auto Trader commercial director Ian Plummer will share their experience and insight about the influx of new auto brands from China on 13 October. Retailers who want to embrace the profitable new opportunity should register now to find out which brands are coming and when, which retail models they will adopt and how retailers can work with the new entrants.
Sign up here: https://bit.ly/3SThA7T
WORLD NEWS
CarMax: ‘Absolute disaster’
US used car giant CarMax’s latest quarterly results were “not even close to any estimates” and described as a “complete disaster”. Consumer demand was weak and the prices of sold vehicles was down. Q2 revenues of $8.1bn missed estimates by £0.41bn. Profit dropped more than 50%. Chief executive Bill Nash said consumer confidence had hit an “all-time low… even lower than the height of the pandemic”.Shares dropped nearly 25% on the results.
3 in 4 EV buyers prefer retailers
Contradicting assumptions that electric car buyers will embrace online sales, a new survey has found that 3 in 4 customers want an omnichannel experience that includes in-person resources. Most respondents still prefer buying from a retailer. “A lot of the things that the EV specialist manufacturers are doing really are net negatives to customers.”
STOCKWATCH
Closing prices on 30 September 2022 and weekly change
Auto Trader Group 515.0p (-60.4p / -11.0%)
Caffyns 550.0p (n/c)
Halfords 131.8p (-16.1p / -11.5%)
Inchcape 682.5p (-38.0p / -5.4%)
Lookers 66.0p (-8.7p / -6.8%)
Motorpoint 179.0p (-4.25p / -2.3%)
Pendragon 27.0p (+4.3p / +17.3%)
Vertu 42.25p (-0.85p / -1.9%)
COMING UP
Friday, Halifax house price index
MONEY MATTERS
High-earners urged to claim £5k pension relief
Top-rate taxpayers are being advised to pay more money into their pension and claim tax relief before 2023’s rule changes. Tax relief is based on the rate of income tax paid; with next year’s changing income tax rates, the amount of tax relief on pension contributions will also fall.
AJ Bell calculates an additional-rate taxpayer could save up to £5,000 by paying the maximum possible before the rules change. “This is a definite planning opportunity.”
HMRC targets retailers with ‘unusual’ VAT warning
HMRC has targeted auto retailers with an educational email and video aimed at reducing VAT errors frequently found on VAT inspections. MHA partner Steve Freeman highlighted the HMRC initiative, describing it as “highly unusual”. He said it increased the pressure on retailers to get the basics right and said it was part of a process of shifting responsibility for the accuracy of returns from an overstretched HMRC.
Tellingly, he said, the email ends with a veiled threat: “We have sent an email to the senior accounting officer (SAO) within your business and asked that they get assurance that this error is not occurring in your dealerships.” Personal penalties of up to £5k per year in which errors occurred can be issued to SAOs.
Tags:
Auto Trader, Available Car, CarMax, China, EV, Furlough, Glyn Hopkin, HMRC, JCB Medway, pensions, Riverside, tax relief, William Morgan 
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