Auto Retail Agenda: 16 January 2023
15 January 2023
- ASTON BARCLAY IN CARZAM ‘RANSOM PAYMENT’
- JASON CRANSWICK NAMED NORTON WAY MD
- CAZOO DUMPS VILLA
- HALFORDS CUTS PROFIT FORECAST
- US 7-YEAR CAR LOANS SURGE
- CARVANA SURRENDERS MICHIGAN LICENCE IN PLEA DEAL
- STOCKWATCH
- COMING UP: UK unemployment, retail sales
- CAUSE FOR OPTIMISM WITH 2023 ECONOMY
- BUY NOW PAY LATER TO IMPACT CREDIT SCORES
Aston Barclay in Carzam ‘ransom payment’
Aston Barclay has been described as extracting a “ransom payment” in the administration of failed online retailer Carzam. The auction house was owed £9,182 plus VAT, and deducted this from £58,900 of car sales proceeds before remitting the balance to the administrators.
“Although this constitutes a ransom payment in the administration,” said administrators Evelyn Partners, “given the quantum and the associated professional costs of pursing this sum, it would not be economical to pursue Aston Barclay for payment.”
The administrators added they expect to declare a distribution to preferential creditors, but it is uncertain whether there will be sufficient funds to enable a dividend to unsecured creditors.
There are 59 employee claims as ordinary preferential creditors, worth £82,820. Secondary preferential creditors mainly include HMRC.
The administrators have received claims totalling £19m from 160 unsecured creditors.
Jason Cranswick named Norton Way MD
Jason Cranswick has been named MD of Norton Way Motors. The role is in addition to his COO position at parent company Marubeni Auto Investment UK.
Companies House data shows Cranswick was appointed on 17 October 2022 but he only announced the position last week.
Existing MD David Grainger has now retired (his last day was Sunday 8 January). David had run the business since the late 1980s; he sold the business in full to Marubeni in 2008.
Speaking to Auto Retail Agenda, Jason said he has been working alongside David since late summer, ahead of taking over the MD role.
“I’m looking forward to growing the group further. We now have a fantastic opportunity to bring harmony and synergies across the wider group.”
Marubeni also recently bought used car supermarket group HPL Motors, for an undisclosed sum. Founder Jonathan Herman will remain as MD and retains a minority shareholding.
Cazoo dumps Villa
Cazoo has chosen not to renew its shirt sponsorship deal with Premier League club Aston Villa. The deal ran for three seasons and was understood to be worth £6m a season.
Cazoo H1 losses almost doubled last year, to £343m.
Halfords cuts profit forecast
Halfords has cut its FY23 profit before tax forecast to £50m-£60m. In June, profit forecast was £65m-£75m. It blamed a challenging labour market, which will limit growth of higher-margin sales at its Autocentres business during the upcoming Q4 MOT peak.
It also cites weakness in the consumer tyre market for longer than initially anticipated.
Halfords is looking to fill 1,000 new automotive technician roles and has introduced a Later Life Apprenticeship programme, as well as focusing on attracting more women and young people from disadvantaged backgrounds.
The firm will outline FY24 expectations at a capital markets day on 30 March 2023.
WORLD NEWS
US 7-year car loans surge
84-month car loans are growing rapidly in the US. By Q3 2022, almost 1 in 5 new car and more than 1 in 10 used car loans ran to seven years, according to Experian. The US already typically offers longer loan periods than the UK. “It’s insane,” said one Hyundai retailer FD. “And it’s just due to the fact the customer is asking for it” – they are requesting “the longest term possible” to reduce monthly payments.
Carvana surrenders Michigan licence in plea deal
Carvana has agreed to surrender its retailer licence in Michigan in lieu of further action by state regulators. In a plea deal signed by Carvana, it will be barred from reapplying for a new licence for three years.
Carvana will also pay a $10k penalty to cover the cost of the state department’s investigation.
Its licence was originally suspended in October 2022, with Carvana accusing the state of “gross regulatory overreach”. Later in October, it announced it was suing Michigan state; its shares slipped 8.4% on the news.
STOCKWATCH
Closing prices on 13 January 2023 and weekly change
Auto Trader Group 559.4p (+19.6p / +3.5%)
Caffyns 500.0p (n/c)
Halfords 180.6p (-37.4p / -18.7%)
Inchcape 918.5p (+76.5p / +2.4%)
Lookers 83.7p (+3.1p / -3.7%)
Motorpoint 145.0p (n/c)
Pendragon 20.7p (+1.5p / +7.5%)
Vertu 55.8p (n/c)
COMING UP
Tuesday, UK unemployment
Wednesday, CPI and RPI
Thursday, RICS housing market survey
Friday, retail sales
Friday, GFK consumer confidence
Thursday 26 January, Auto Retail Live agency conference: sold out!
MONEY MATTERS
Cause for optimism with 2023 economy
After the UK economy beat expectations by rising 0.1% in November, there is hope the UK can avoid falling into recession – aided by falling wholesale gas prices and profits at consumer-facing companies holding up. It would take a 0.4% contraction in December to tip the economy into a technical recession.
Last week, the FTSE 100 rose to a near-record high on the news.
Buy now pay later to impact credit scores
Buy now pay later companies are bracing for regulation from the FCA. New powers are expected later this year – including the requirement to perform credit checks. Zilch, a lender with three million users, is already set to start sharing data on customer balances and repayments with credit rating agencies.
The company calls it a positive move as consumers will be able to build up credit scores without taking out credit cards.
Tags:
aston barclay, Buy now pay later, car loans, Carvana, Carzam, Cazoo, FCA, Halfords., Jason Cranswick, Marubeni, NFDA, Norton Way, UK economy 
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