• COVID COMPARISON: NORTON WAY AND SWANSWAY
• TRUST FORD TREE ROW
• AUTO RETAIL IN SUNDAY TIMES RICH LIST
• CAZOO POSTS 3.3% PROFIT MARGIN
• NEW AUTOMOTIVE LGBT+ NETWORK
• JLR GERMANY RETAILERS WANT MORE HELP
• NEW BMW NORTH AMERICA BOSS
• STOCKWATCH – Marshall up after positive AGM when Daksh Gupta reappointed with 100% approval
• COMING UP – Inchcape AGM
• DATA CORNER – New records for car average age
• ‘INFLATION GENIE ESCAPING THE BOTTLE’
• RETAIL UP 9.2%

Covid comparison: Norton Way and Swansway

Norton Way saw turnover grow 8.3% to £282.9m in the year ended 31 March 2020, which the directors said was thanks to a 27% growth in corporate sales. However, profit before tax dropped from £3m to £2.6m. This represents a decline in return on sales from 1.2% to 1.0%.

Swansway also revealed its 2020 results, but these were to the year ended 31 December. Although turnover fell from £725.5m to £711.8m, profit before tax rise significantly, from £4.0m to £10.2m. Return on sales rose from 1.14% to 1.98%.

Staff numbers dropped from 1,220 to 1,044 following a “strategic review of the cost base” and administration expenses declined 3.9%. Swansway also put a majority of employees on furlough during the first lockdown, reporting it quickly unfurloughed them when the business reopened on 1 June.

Sites grew from 19 to 20 with the acquisition of a Volkswagen passenger cars site in Oldham. The directors reported a “particularly significant improvement in contribution from the Audi division”, with Crewe, Preston, Blackburn and Carlisle the standouts.

 

Trust Ford tree row

Trust Ford apologised after cutting down 11 trees in a conservation area at its site in Wimbledon, recently acquired from Cambria. The trees were felled as they were causing health and safety issues with vehicle transporters, but the company was caught out regarding preservation orders with the trees.

“We got it wrong” said the company in a statement, which has listed how it plans to “heal the wounds”. Measures include planting new semi-mature trees and shrubs around the site, a £5k donation to a community allotments project and an invitation for Trust Ford’s Princes Trust apprentices to plant a tree at each of its 60 UK sites.

Merton Council said that “in the interests of value for money for the taxpayer, we do not want to resort to legal action, so we’re pleased that Ford is swiftly making good on the destruction it has caused”.

https://bit.ly/3wtWXUw

 

Auto Retail in Sunday Times Rich List

Cargiant’s Geoffrey Warren is the leading auto retail executive on the 2021 Sunday Times Rich List. He is placed 114 with a £1.14bn fortune, up £145m on 2020. Lady Philomena Clark and family are in 151 with a £1.14bn fortune, up £10m.

IM Group’s Lord Edmiston is in 181th place with £897m, but his fortune fell £150m in a year. Cazoo’s Alex Chesterman is a new entrant, placing 215^th with a £750m fortune. His stake in Cazoo is worth £600m, despite selling shares in the business worth £100m earlier in the year.

https://bit.ly/2Te5o4X

 

Cazoo posts 3.3% profit margin

Q1 financials from Cazoo show it made a 3.3% gross profit margin (£3.7m) on revenue of £113.9m. The online retailer sold 9,762 cars – 7,785 retail and 1,977 wholesale. Retail gross profit per unit was £143 due to “an improved buying mix, stock turn and higher finance attachment”. The business says it is on track for FY21 revenues approaching £700m and to launch in Germany and France.

https://bit.ly/3udLgQn

 

New automotive LGBT+ network

Representatives from Jardine, Arnold Clark and Auto Trader are among a group of companies to start a network championing the LGBT+ community. The network, which includes several OEMs, is now appealing for other automotive companies to join. For more information, email Ed Rogers on eroger47@ford.com

https://bit.ly/3fcFdar

 

 

WORLD NEWS

JLR Germany retailers want more help

JLR retailers in Germany are complaining the brand is not doing enough to help them bounce back from Covid, Brexit and the chip crisis. “Retail lacks guidance in the form of clear short-, medium- and long-term strategy for both brands,” said JLR dealer association member Rolf Weinert.

Retailers complain of a lack of hard numbers for medium and long-term planning, affecting their ability to secure bank credit for investment. “The retail trade needs realistic market planning for the next few years,” said Mr Weinert.

In other news, JLR currently has an order backlog nearing 100k vehicles due to the chip shortage. The new Land Rover Defender and plug-in hybrid vehicles are in particular demand with the waiting list for some models approaching 12 months. “Order books will normalise in six, nine or 12 months’ time,” said CFO Adrian Mardell.

https://bit.ly/3bNuykc

 

New BMW North America boss

Former Mini boss Sebastian Mackensen is taking over as BMW North America CEO from Bernhard Kuhnt on 1 September. Mr Mackensen has extensive North America experience and was Audi’s sales chief for the Americas for five years. He has also managed business development for Porsche Cars North America.

Kuhnt took over BMW North America in 2017 and saw the brand take the US luxury sales crown in 2019 and 2020. He is a former Mercedes-Benz executive and retailer, and is reportedly well-liked by US retailers. His new role is running BMW’s German business.

https://bit.ly/3hNsZXu

 

 

STOCKWATCH

Closing prices on 21 May 2021 and weekly change

Marshall up after positive AGM with Daksh Gupta reappointed with 100% approval

Auto Trader Group 562.8p (+11.0p / +1.9%)

Cambria 83.0p (-0.5p / -0.6%)

Caffyns 400.0p (n/c)

Halfords 380.4p (-9.0p / -2.3%)

Inchcape 775.5p (-19.0p / -2.4%)

Lookers 64.0p (-4.4p / -6.6%)

Marshall Motor Holdings 178.5p (+8.5p / +4.8%)

Motorpoint 281.0p (-2.5p / -0.8%)

Pendragon 18.6p (-0.12p / -0.6%)

Vertu 45.0p (-1.2p / -2.6%)

 

 

COMING UP

Tuesday, Aston Martin AGM

Thursday, Inchcape AGM

 

DATA CORNER

New records for car average age, vans in use

Vehicles in use on UK roads in 2020 fell for the first time since 2009, to 40.35m units, says new SMMT Motorparc data. The average age of a car is 8.4 years, a new record, and the average car was built in 2011 (a brand new car is nearly 20% better in terms of CO2). Nearly 10m vehicles form 2008 and earlier are still in service. Vans have also reached a historic high, representing 11.4% of vehicles on the road.

 

MONEY MATTERS

‘Inflation genie escaping the bottle’

Bank of England chief economist Andy Haldane has warned the “inflation genie” is escaping the bottle. The MPC should start “tightening the tap” and begin scaling back quantitative easing, or risk long-term inflation. He is currently a lone voice: Bank of England governor Andrew Bailey insists inflation is currently “transitory” but admits the BoE is “watching extremely carefully [and] will take action when we think it’s appropriate”.

https://bit.ly/3yrzFQZ

 

Retail up 9.2%

ONS data has shown a 9.2% month-on-month sales surge in shops after they reopened on 12 April. Growth far exceeded economists’ predictions and was led by fashion and other non-food stores. A GfK consumer confidence survey last week found levels at their highest since March 2020. Surprisingly, online sales were down 5.6% month-on-month. PwC’s Lisa Hooker said the figures suggest “there’s no sign of a permanent shift to online shopping”.

https://bit.ly/34aRvKa