Auto Retail Agenda: 27 September 2021
25 September 2021
- ARNOLD CLARK PROFIT SWELLS
- CINCH AND PARK’S FOOTBALL NAMING ROW IN COURT
- FORAY LOSS, PERRYS PROFIT
- CARSHOP CREATES 25 JOBS ON AUTOWORLD SITE
- SONIC BUYS RFJ AUTO FOR $700m
- US CONSIDERS ‘COLD WAR LAW’ TO SOLVE CHIP CRISIS
- STOCKWATCH
- COMING UP – UK consumer credit
- FURLOUGH ENDS ON THURSDAY
- FURLOUGH PAYBACKS REACH £1.3bn
Arnold Clark profit swells
Arnold Clark saw profit before tax grow 33.7% from £117m to £156.5m in the year ended December 2020, despite revenue falling 15% to £3.8bn. Used car sales fell 20.2% and new car sales declined 26.5% but the business ended the year with significantly more cash resources, boosting net funds available to £524m.
CEO Eddie Hawthorne said more than 12,000 employees were furloughed during the first Covid lockdown, with the company receiving £64.3m in CJRS grants. The final furloughed employees returned in October 2020 and the business did not furlough staff during the second lockdown. £44m of VAT was deferred and £11m claimed in Business Rates Relief.
£2m was spent to make locations Covid-secure, including the purchase of PPE and delivering staff training.
The company also accelerated the rollout of digital services, allowing Click & Deliver and Click & Collect, with 84k vehicles delivered this way and 304k customers using Arnold Clark’s online check-in system. “We have achieved in five months what would historically have taken us five years.”
Nearly 230k customers have downloaded the Arnold Clark smartphone app. This gives owners personalised reminders for MOT, servicing and road tax, allows them to access finance information and payment schedules – and scan vehicle registrations of cars they like to find similar models in stock.
Mr Hawthorne said other board decisions during the year included reducing capital and discretionary expenditure, leaving six smaller branches closed following the first lockdown, and the “difficult but necessary decision to reduce our headcount”.
Cinch and Park’s football naming row in court
Scottish Premiership champions Rangers continue to refuse Cinch branding on team shorts or advertising boards despite the BCA-owned retailer signing an £8m, five-year package with the Scottish Professional Football League in June.
Douglas Park is Rangers chairman – and owns Park’s of Hamilton, one of Scotland’s largest private retailer groups.
Mr Park believes the SPFL deal breaches a commercial arrangement between his retailer and Rangers. He won a legal ruling stopping arbitration proceedings to resolve the situation. The dispute is currently being heard in the courts.
Foray loss, Perrys profit
Wiltshire Ford specialist Foray Motor Group has reported a £279k loss for the year ended December 2020, a £101k improvement on 2019’s £380k loss. Turnover fell 22.6% but the company successfully submitted an R&D tax claim for 2017 and 2018, resulting in a £922k tax rebate and profit after tax of £643k.
Meanwhile, Perrys Group saw pre-tax profit hit £3.2m in 2020, up from £1.6m in 2019, on a turnover of £491m, down from £608m in 2019. Perrys also saw net debt reduce to £1.2m from £7.8m. Operating profit before exceptional items was £5.2m, compared to £3.1m in 2019.
CarShop creates 25 jobs on Autoworld site
Used car retailer CarShop opens in Willenhall, West Midlands next month, creating 25 jobs. The 4.6-acre, 400-car site is on a former Autoworld site. CarShop Wolverhampton will be welcoming, comfortable and enjoyable, said CEO (and ex-Sytner BMW Division MD) Nigel Hurley.
WORLD NEWS
Sonic buys RFJ Auto for $700m
Sonic Automotive is to acquire Texas-based RFJ Auto Partners, one of North America’s largest privately-owned retailers, for $700m. When the deal closes in December, RFJ’s 33 franchised and used vehicle sites will add $3.2bn in annual revenue to Sonic.
US considers ‘Cold War law’ to solve chip crisis
The White House is considering invoking a ‘Cold War-era national security law’ to gain inventory information from semiconductor suppliers. The aim is to ease bottlenecks that have idled US car plants.
The Commerce Department is currently asking semiconductor suppliers to voluntarily provide supply chain information within 45 days from request – but if information is not forthcoming, the Defence Production Act may be invoked.
STOCKWATCH
Closing prices on 24 September 2021 and weekly change
Auto Trader Group 611.2p (+6.0p / +0.9%)
Cambria 82.5p (n/c)
Caffyns 500.0p (-25.0p / -4.8%)
Halfords 303.6p (+5.2p / +1.6%)
Inchcape 843.0p (-7.0p / -0.8%)
Lookers 67.5p (+1.1p / +1.6%)
Marshall Motor Holdings 228.0p (-17.0p / -7.1%)
Motorpoint 385.0p (+29.0p / +7.8%)
Pendragon 18.5p (-1.1p / -5.7%)
Vertu 52.0p (-0.6p / -1.1%)
COMING UP
Tuesday, FCA Annual Public Meeting (register to watch)
Wednesday, UK consumer credit
Wednesday, BRC Shop Price Index
Wednesday, Nationwide House Price Index
Thursday, UK GDP
MONEY MATTERS
Furlough ends on Thursday
The CJRS furlough scheme closes on Thursday 30 September. Employees have until 14 October to submit their September claims. Around 1m people are still on furlough; at its peak, the £70bn scheme supported almost 9m jobs.
Furlough paybacks reach £1.3bn
Businesses have so far returned £1.3bn in furlough grants to HMRC, the government has revealed. £300m has been returned in the past three months. The voluntary disclosure service will continue into 2022.
HMRC also warns it is cracking down on fraudulent furlough claims through its 1,250-strong Taxpayer Protection Taskforce.
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