Auto Retail Agenda: 17 August 2020
16 August 2020
- THREE RETAILERS REPORT 2019 RISE IN PROFIT
- CAZOO ‘HIRING SPREE’
- PRICES STABLE AS USED DEMAND SOARS
- V-SHAPED RECOVERY FOR MOTORCYCLE SALES
- FURROWS WINS FORD CHAIRMAN’S AWARD
- WORLD NEWS – US retail ‘fully recovered’, Ireland EV strategy ‘out of step’ with EU
- STOCKWATCH – Quiet week on the markets
- COMING UP – Marshall H1, Vertu AGM
- MONEY MATTERS – JLR misses state bailout, World Bank predicts five-year recovery
- AND FINALLY… Ex-footballer earning more as car dealer
Three retailers report 2019 rise in profit
Exeter’s City West Country saw profit before tax grow from £5.7m to £6.8m in the year ended 31 December 2019, despite turnover marginally declining. Return on sales rose from 1.9% to 2.3%. The Mercedes-Benz and Smart retailer retained nearly 30% of the additional profit earned with over £2.5m added to its reserves.
Essex’s Toomey Motor Group (the trading name of MJT Securities Ltd) performed strongly too, with operating profit up 15.5% to £8.7m. Turnover was also up 5.7% to £193m. The company said the completion of a large export contract was behind the significant rise in profit.
Auto Retail Network also understands the group’s Basildon Vauxhall site topped the network’s Q2 2020 league for CSI.
North Wales retailer WR Davies Motors reported a boost in pre-tax profit from £303k to £1.2m, with turnover rising to £126m. Director Neil Sullivan said the 2019 results were helped by investment in additional sites, new builds and refurbishments, and improvements in processes.
Cazoo ‘hiring spree’
Cazoo is focusing on a high street push and is hiring store management and assistant roles in “customer centres” where buyers pick up cars rather than having them delivered to their homes. Hiring is nationwide, including Birmingham, Bristol and Cardiff, and follows Cazoo’s purchase of Imperial Cars.
The £1bn startup is converting most Imperial sites to Cazoo Customer Centres. CEO Alex Chesterman insisted they are not traditional auto retailers but “provide the infrastructure for us to fulfil our continually growing online sales”.
Used car demand thriving but prices stable
BCA recorded its highest ever online sale on 28 July with almost 6,300 vehicles entered as volumes throughout July averaged 30% higher than normal. Daily entries in excess of 5,500 vehicles is “well above the norm” and comes as retailers battle to maintain healthy forecourt used car stock levels.
Despite up to 1,500 buyers joining individual BCA online events, the auctioneer says values remained stable throughout July, with an average of £8,517 marking a month-on-month decline of 0.6%. Conversion rates, however, were strong.
BCA UK remarketing COO Stuart Pearson said there was no sign the post-lockdown demand for more affordable used car stock was subsiding – adding that in the cheaper end of the market, there had been “some unprecedented price increases”.
V-shaped recovery for motorcycle retailers
Motorcycle sales are surging as the public avoids trains and buses, says head of the NMDA Stephen Latham. All variants showed year-on-year growth with scooter sales rising 56.6%. The NMDA and MCIA are running a campaign advising motorcycles are “Covid-safe to ride”.
Furrows wins Ford Chairman’s Award
Furrows Telford has been awarded the Ford Chairman’s Award for sales and service performance. Ford of Britain MD Andy Barratt said the team were “continuing a long line of exemplary customer focus and care,” and described the success as “simply outstanding”. The Ford Chairman’s Award Programme is exclusive to the brand’s top 30 national performers.
WORLD NEWS
US retail ‘fully recovered’
US retail sales reached a new record high in July after rising by 1.2%. Economists say the figures show retail in the world’s largest economy has fully recovered from the pandemic, even if the figures were slightly down on economists’ predictions. This was blamed on a small fall in the sale of cars.
Ireland EV strategy ‘out of step’ with Europe
Neil Connolly of west Ireland’s Connolly Motor Group believes the country is pursuing its own course with electric cars that’s out of step with the rest of Europe. “It’s 1 million cars by 2030,” he said, contrasting with the European target of phasing out IC cars by 2040. The “clear, necessary steps to a transition everyone accepts must happen” were not being taken.
STOCKWATCH
Closing prices on 14 August 2020 and weekly change
Quiet week on the markets
Auto Trader Group 555.8p (-1.8p / -0.3%)
Cambria 47.0p (+1.0p / +2.1%)
Caffyns 270.0p (n/c)
Halfords 163.8p (+6.0p / +3.7%)
Inchcape 488.6p (-4.6p / -0.9%)
Lookers Shares suspended at 21.0p
Marshall Motor Holdings 122.5p (n/c)
Motorpoint 271.0p (+11.0p / +4.1%)
Pendragon 8.00p (n/c)
Vertu 21.1p (-0.9p / -4.1%)
COMING UP
Tuesday, Marshall H1 results
Wednesday, RPI and CPI
Thursday, Vertu AGM
Thursday, UK retail sales
Friday, Mitsubishi retailers to meet with Colt Car Company
MONEY MATTERS
JLR does not qualify for state bailout
JLR will not receive emergency funding under the government’s Project Birch aid package. The government is understood to have concluded it does not qualify as parent company Tata Group was sufficiently well financed. The company would also have been obliged to speed up the electrification of its model range.
World Bank predicts five-year recovery
Recovery from the Covid downturn will take more than five years, warns new World Bank chief economist Carmen Reinhart. She encouraged economists not to confuse early rebounds with a true recovery, which is predicted to take even longer than the financial crisis aftermath.
Ex-footballer earning more as car dealer
Former Hull City footballer Leon Dawson says he has “not looked back” after leaving professional football and setting up Minster Car Co in Hull. He is earning more than he did as a footballer and has employed three more former teammates. Last week, Mr Dawson delivered a Mercedes-AMG G63 to another former teammate, West Ham’s £25m star Jarrod Bowen.
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