Auto Retail Agenda: 18 October 2021

16 October 2021

LISTERS PROFIT UP ON COVID SUPPORT
PRE-REGISTRATIONS PLUNGE SET TO CONTINUE
UK ‘HAS MORE JOB VACANCIES THAN WORKERS’
EDEN SWITCHES TO EV-ONLY COURTESY CARS
RETAILER BECOMES FOODBANK DONATION HUB
US RETAIL CHIEF FACES 30 YEARS IN PRISON
EU REGISTRATIONS DOWN 23% IN SEPTEMBER
STOCKWATCH: Vertu up on sparking half-year results; full-year profit forecast increased 19% to at least £65m
COMING UP: RPI, CPI, GFK Consumer Confidence
INSOLVENCIES RISE IN SEPTEMBER
INTEREST RATE RISK TO COVID LOAN COSTS

Listers profit up on Covid support

Listers Group made a profit before tax of £20.6m in the year ended March 2021, up from £7.9m in 2020. The profit includes £12.5m of furlough support and £4.3m of business rates relief and local authority grants. Listers used furlough until April 2021.

Turnover fell from £1.2bn to £1.0bn, due to new vehicle sales falling 23% and used sales falling 18.5%. Aftersales turnover fell 13.3%.

No dividends were proposed or paid during the year; two dividends totalling £15.5m were paid during the previous year.

Pre-registrations plunge set to continue

New cars registered in the name of a retailer or OEM have fallen rapidly since 2020 across Europe. Tactical pre-registrations have fallen as a result – and the trend will continue as brands switch to an agency sales model and receive a sales provision from an OEM rather than volume-driven bonuses. Leasing and subscriptions will also quash pre-registrations.

“There will be less scope to sell discounted cars as nearly new,” says automotive intelligence provider Dataforce. “The times of high tactical registrations are probably gone for good.”

UK ‘has more job vacancies than workers’

The UK economy is generating more jobs than the labour force can fill, leading growing numbers of businesses to report recruitment difficulties. Workers choosing to take early retirement is having a particular impact. This risks restricting GDP forecasts and economists say shortages could be acute until the middle of 2022 – with some fearing an economic domino effect if wage bills rise and costs are passed onto customers.

https://bit.ly/3AOteaG

Eden switches to EV-only courtesy cars

Eden Motor Group is switching its entire Vauxhall courtesy car fleet to electric vehicles. Customers at its 13 Vauxhall retailers will now be offered a Corsa-e EV. All cars will be fully charged before collection by customers. “This initiative allows customers to sample an electric car completely free of charge,” said operations director James Kurd.

“It will also help us reduce the exhaust emissions of our courtesy car fleet across our Vauxhall network to zero.”

Retailer becomes foodbank donation hub

Stourbridge Mazda has become a donation hub for a local food bank after contacting locals via Facebook to recommend organisations that need help. The retailer is encouraging both customers and non-customers to stop by, drop off donations – and stay for a coffee.

https://bit.ly/3FVdaHJ

WORLD NEWS

US retail chief faces 30 years in prison

US former retail executive Bart Reagor faces up to 30 years in prison after being found guilty of making false statements to a bank. He was accused of diverting more than $1.7m of a $10m commercial loan to his personal bank account.

Reagor was co-principal of Reagor Dykes Auto Group in Texas, which went bankrupt in 2018 following accusations of floorplan fraud. Ford Credit and other lenders sued the auto group: Ford Credit said the company sold more than 1,100 vehicles without repaying $41m to fund their acquisition.

15 other Reagor Dykes employees are awaiting sentencing after pleading guilty to various fraud charges.

https://bit.ly/3lN9UpK

EU registrations down 23% in September

September 2021 new car registrations in the EU fell 23.1% to 718k – the lowest September since 1995. Italy was down 32.7%, Germany down 25.7%, France down 20.5% and Spain down 15.7%. Year to date, Germany – Europe’s biggest new car market – is down 1.2%.

https://bit.ly/3ANcuk4

STOCKWATCH

Closing prices on 15 October 2021 and weekly change

Vertu up on sparking half-year results; full-year profit forecast increased 19% to at least £65m

Auto Trader Group 598.0p (+16.6p / +2.8%)

Caffyns 500.0p (n/c)

Cambria 82.5p (n/c)

Halfords 290.6p (+12.2p / +4.2%)

Inchcape 812.0p (+2.0p / +0.2%)

Lookers 64.6p (+0.3p / +0.4%)

Marshall Motor Holdings 250.0p (+11.0p / +4.4%)

Motorpoint 350.0p (-22.0p / -6.0%)

Pendragon 18.2p (-0.85p / -4.5%)

Vertu 60.8p (+6.2p / +10.7%)

COMING UP

Wednesday, RPI, CPI

Friday, retail sales

Friday, GFK Consumer Confidence

MONEY MATTERS

Insolvencies rise in September

Company insolvencies in September rose to the highest level since the start of the Covid pandemic. There were 56% more insolvencies this year than September 2020. The withdrawal of corporate support measures means experts predict the upward trend will continue over the next 12 months.

A third of small businesses are classed as “highly indebted” by the Bank of England: this is where debt levels are more than 10 times their cash balances. Meanwhile, accountancy firm EY has warned profit warnings by listed companies are rising, from 19 in Q2 to 51 in Q3.

https://bbc.in/3FXvyj9

Interest rate risk to Covid loan costs

The cost of Covid emergency loans will rise once the Bank of England increases interest rates. Only half the lenders of £26.4bn of CBILS loans (up to £5m for each loan was allowed) did so at fixed interest rates. Lenders were allowed to set their own rates, as long as they were below 14.99%.

Bounceback loans of up to £50k for small businesses were all offered at a fixed interest rate of 2.5%.

https://bit.ly/3lM1L56

Tags: Bank of England, Covid loans, CPO, Eden, listers, pre-registrations, Reagnor Dykes, RPI, Stourbridge Mazda, UK job market, Vertu

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