12 August 2018

• PLATTS STOKE SOLD TO CAR SUPERMARKET
• WESTOVER OPERATING ABOVE INDUSTRY AVERAGE
• LISTERS REPORTS PROFIT DROP
• MITSUBISHI STRENGTHENS RETAILER TRAINING TEAM
• MOTORPOINT SITE GETS ‘BEST EMPLOYER’ VOTE
• USED MARKET CONTINUES TO SHOW STRENGTH
• WORLD NEWS – China/US trade war hits Mercedes
• STOCKWATCH – Inchcape continues slide
• LAUNCH DIARY – Hyundai i30 N Line, VW Grand California
• COMING UP – Inflation figures
• MONEY MATTERS – car makers return worst dividends
• OUR BLOG – Auto Retail Q3 briefing gives reasons to be cheerful

Platts Garage closes after 80 years

A loss making fifth generation family business has closed its doors and the site sold to a used car supermarket.

In a statement on social media, Fiat, Alfa Romeo, Abarth and Jeep retailer, Platts Garage, of Staffordshire, said: “After 80 years trading in Stoke-on-Trent it is with a heavy heart that Platts Garage Ltd will be ceasing trading. The Platt and Littler family would like to thank everyone we have had dealings with over the years.”

Its accounts to the year ended February 2017 revealed a loss of £356,000 and £198,000 in 2016. This February it sold the lease on another site, in nearby Stafford, to Stoneacre.

Platts’ 3.5 acre base in Stoke-on-Trent and all the staff have been taken over by Motordepot, its fifth acquisition in the past year. This follows a similar move last month with a centre in Sheffield which is now being refurbished and is due to open this autumn.

Westover operating above industry average

Multi-franchise Westover Group reported turnover up but operating profit down as margins were squeezed but directors say the Wiltshire/Dorset-based company operates with above industry average efficiency.

Returning its 2017 accounts, the company showed an OP of £5.7million against £7.9m in 2016. Total turnover was up slightly, at £336.8m, and turnover from new and used car sales rose to £292m against £288m in ’16 but its return on sales of 1.7% (2.4% in 2016) are still ahead of the industry average of 0.87%.

They said: “The rise in turnover during the year reflects the ongoing resilience of the business despite a deteriorating market for car sales overall although margins are being eroded due to the increasing competition between rival manufacturers.”

Listers reports profit drop

The Listers group saw profit-before-tax drop to £11.8 million in the year to March 31, 2018, against £16m the previous year.

Of its 15 franchises, Audi, Mercedes-Benz and VW made the most significant contributions to those profits.

Filing its latest accounts, the company said that new car sales fell by 5.6% and used by 0.5%. However, after-sales revenues were up by more than 6%, helping to grow overall group turnover to £1.2billion which is fractionally up on the 2017 figures.

Mitsubishi strengthens retailer training team

Mitsubishi Motors in the UK has appointed Annette Baber Smith as its after-sales training manager. She has 22 years in the motor trade, starting as an apprentice technician before moving up to service manager with a retail group.

The company’s Training Academy runs up to 300 classroom courses a year and an increasing number of e-learning modules for sales, after-sales and technical staff from its 177-strong dealer network.

Emma Soble, general manager network development at Mitsubishi Motors in the UK, said: “We are delighted that Annette has joined the team and believe her vast experience in the motor industry and particularly the dealer network will be a useful asset to the dealer staff she will be training and mentoring.”

Motorpoint site gets ‘best employer’ vote

Motorpoint’s site at Birtley, County Durham, has been named as the Best Company to Work For in the North East after topping a list of thousands, says the Sunday Times.

All employees get private healthcare, shareholder options, life assurance and staff discounts. They also have an extra holiday for their birthday, enhanced maternity and paternity leave and paid time off if they are moving house or getting married.

Motorpoint Group reported PBT of £20 million in its latest accounts on turnover of £991m.

Used market continues to show strength

The used sector remains strong with year-on-year values rising by some £500 last month despite average age and mileage increasing and the market taking its usual summer holiday dip, according to BCA Marketplace.

Stuart Pearson BCA, COO UK Remarketing, said: “It was no surprise that demand from professional buyers softened slightly as the hot weather and holiday season began, but overall market activity continued at very healthy levels in July.  Buyers focused more attention on cleaner vehicles that could be retailed more quickly, with poorly presented, damaged or incomplete examples needing to be sensibly valued to sell first time.

“While fleet and lease values fell marginally, taken in the context that this was from record levels in June and we are in the peak holiday season, it demonstrates the strength in depth across the used car market.  Underlining this, dealer part-exchange stock posted the sixth consecutive month of record values at BCA and nearly-new values hit one of the highest points on record.”

WORLD NEWS

The China-USA trade dispute is hitting deliveries of Mercedes-Benz SUVs built in Alabama and shipped to Shanghai. Chinese customs officials are checking the rear brakes of GLE and GLS models built between May 4 and June 12 which they say are `insufficient’ and pose `a safety risk’.

On Wednesday, China said it would impose additional tariffs of 25% on $16 billion worth of U.S. imports from steel products to cars.

In June, Daimler cut its 2018 profit forecast because of the trade war, sparking fears of a wave of earnings downgrades in the industry.

Lotus could be revived under a £1.5 billion plan with its parent company, Geely.

The Chinese car giant, which also controls Volvo, is said to be considering expanding the Lotus factory in Norfolk, hiring another 200 engineers and possibly opening a second factory plus a design centre in the West Midlands.

https://bit.ly/2ns8xxG

STOCKWATCH

Closing prices at Friday August 10 and weekly movement.

BCA 236.0p (+0.5p)

Cambria 56.5p (-2.0p)

Caffyns 425.0p (no change)

Inchcape 703.0p (-24.0p)

Lookers 106.4p (+1.0p)

Marshall Motor Holdings 157.0p (-2.5p)

Motorpoint 238.0p (-2.0p)

Pendragon 26.4p (+2.4p)

Vertu 50.0p (no change)

LAUNCH DIARY

September:

Hyundai i30 N Line performance hatchback. From £21,255

Early 2019:

VW Grand California camper van. Extended version of world’s best-selling camper. Prices tbc.

COMING UP

August 15. ONS: Consumer price inflation.

November 29.  ASE’s Financial Conference for motor retail management.  Speakers discuss best practice and key challenges from a financial management perspective. Contact events@ase-global.com.

MONEY MATTERS

A sharp rise in dividends from the mining sector failed to halt a drop in headline returns of more than 2% and car makers performed the worst of all, with a 94% fall in average ordinary dividends paid, according to Link Asset Services.

https://bit.ly/2w3v0p5

Positive GDP figures failed to halt the slide in sterling against the dollar and the euro and it remains flat at around a nine-month low. Government data showed that GDP rose 0.4% in Q2, double that of Q1. However, although the growth rate was in line with expectations, its pace slowed from 0.3 to 0.1 per cent in May/June.

Finance analysts say the figures make a second rate rise this year all but impossible for the Bank of England.

OUR BLOG

Auto Retail Q3 briefing gives reasons to be cheerful

I doubt I was the only one tuning into the Auto Retail Network Q3 webcast earlier this week who found the message coming from the sharp end of the business quietly reassuring.

Between them Andy Bruce, CEO of Lookers, Dale Wyatt, Director of Automobile at Suzuki and Naomi Hahn, Audience and Brand Director, Auto Trader, have as good an insight as any into our industry and the breadth of their differing perspectives provided an excellent and rounded overview.

And it was fascinating to see them knock down the issues usually presented in the media as huge problems.

`Demon’ diesel versus AFVs? Andy Bruce said that sure, diesel has taken a hammering and market share is still shrinking but there is still today, and will be tomorrow, a sizeable hardcore of demand. Some further shrinkage is inevitable but he reckons it will plateau out at what will still be a significant number.

What about the state of the trade itself? In a week when Pendragon’s profit plunge made more headlines, it was warming to hear Mr. Bruce point out that actually, most people seem to be doing OK – despite Brexit and its attendant uncertainties and the bigger upheaval around WLTP.

Again, the news speaks only of new car sales dropping but, as the panel pointed out, a predicted market of 2.4 million new and 7.9 million used is still a hell of a lot of metal to move and business to be had. Interesting too to hear that cars eight years old or more are dropping down the AT searches as people’s budgets got bigger. There is spending money out there.

There was much more in a similar vein, calm and measured, data-backed answers to the challenges so often blown up by the press and, if you haven’t seen it, I do urge you to watch on the catch-up. It will be 30 minutes well spent.

On a more personal note, let me say how sorry I am that family owned Platts Garage has gone. It was based in Stoke-on-Trent, the city I come from, and I knew the people there well. No disrespect to PLCs or big companies run for their shareholders but there is something different about a business where the name of the MD is the same as that above the door.

John Swift

Editor
Auto Retail Agenda

Tags: Auto Trader, Inchcape, listers, Lookers, MotorDepot, Motorpoint, Platts, Westover