• CINCH CUTS 2024 LOSSES
• CITY WEST COUNTRY MERCEDES 2023 PROFIT TUMBLES
• STRATSTONE JLR STOCKTON HIT BY EV CHARGER FIRE
• ‘GREENLASH’ NAMED A WORD OF THE YEAR
• SHORT SELLER TAKES STAKE IN CARVANA
• US NEW CAR SALES UPTICK
• STOCKWATCH
• COMING UP
• UK PLC UNDER THREAT FROM US ACTIVIST INVESTORS

Cinch cuts 2024 losses

Used car retailer Cinch saw its pre-tax loss decline from £176m to £118m in the year ended March 2024. Revenue fall from £1bn to £932m.

During the year, it listed an average of 7,670 cars for sale, down from 8,801 in the previous year. The directors said Q3 had been impacted by “rapidly falling” used car prices. “The ongoing war in Ukraine, continuing high energy and fuel prices, persistent high inflation and interest rates have continued to adversely impact consumer confidence.

“The group will continue to invest in promotional activities to grow brand consideration… focus on efficient buying of vehicles to increase unit economics and invest in data to drive insight-led commercial decision making.”

The directors added the group will explore opportunities for growth “through new marketplaces and strategic investments and acquisitions”.

In October, Cinch owner Constellation Automotive slashed its pre-tax loss from £135m to £74m. Revenue fell from £9.7bn to £9.3bn.

In December, sales at Webuyanycar fell by almost £1bn, with revenue falling from £3.5bn to £2.6bn. Pre-tax profit fell from £85m to £48.3m.

https://tinyurl.com/4df8z4fp

 

City West Country Mercedes 2023 profit tumbles

Mercedes-Benz retailer City West Country saw profit tumble from £8.5m to £568k in the year ended December 2023, the first year of Mercedes-Benz agency sales. Revenue was also slashed from £349m to £211m – but cost of sales fell from £313m to £184m.

Return on sales fell from 2.5% to 0.3%.

“The company… embraced the move to the agency model introduced by Mercedes-Benz,” said the directors.

“There was an anticipated decrease in turnover due to this change in franchise model and a reduction in gross profit earned, which was reflective of the changing used car market conditions post Covid 19.

“The directors consider the financial performance in 2023 to be satisfactory considering the wider economic climate, the extremely competitive UK motor retailing marketplace and the general cautious outlook adopted by consumers.”

 

Stratstone JLR Stockton hit by EV charger fire

Stratstone JLR Stockton in Stockton-on-Tees, County Duram, was engulfed by a fire last Thursday. It took three hours to extinguish the blaze.

An investigation found the blaze was contained to the workshop and no cars were damaged. The showroom was closed due to safety precautions but the retailer is expected to fully reopen early this week.

“The cause of the fire is believed to have been an EV charging point,” said Cleveland Fire Brigade.

https://tinyurl.com/wu8e77u5

 

‘Greenlash’ named a word of the year 

The FT has named ‘greenlash’ a word of 2024. It is described as “the backlash against environmental policies”.

https://tinyurl.com/wpzhz6cv

 

 

WORLD NEWS

Short seller takes stake in Carvana

Activist short seller firm Hindenburg Research has taken a position in online used car retailer Carvana and called the company’s accounting and underwriting practices into question.

Hindenburg is known for exposing financial irregularities at automotive startups Nicola and Lordstown Motors. “Our research… shows Carvana’s turnaround is a mirage,” it said in a report titled ‘Carvana: A father-son accounting grift for the ages’.

Carvana disputed the report and called it “intentionally misleading and inaccurate”.

https://tinyurl.com/mv9cckd8

 

US new car sales uptick

Lower interest rates and better deals helped turn around US new car sales towards the end of 2024. It saw GM and Ford report their best year of sales since 2019, with both up 4%. “It’s just becoming an easier time to buy a vehicle,” said Edmunds executive director Jessica Caldwell.

https://tinyurl.com/3t2wkuyr

 

 

STOCKWATCH

Closing prices on 3 January 2025 and weekly change

Auto Trader Group 793.4p (+2.0p / +0.2%)

Caffyns 450.0p (n/c)

Halfords 131.0p (-3.0p / -2.2%)

Motorpoint 130.5p (-3.0p / -2.2%)

Pinewood 355.5p (+9.0p / +2.5%)

Vertu 60.2p (+1.0p / +1.6%)

 

 

COMING UP

Monday, 2024 new car registrations final figures

Wednesday, UK retail sales

 

 

 

MONEY MATTERS

UK plc under threat from US activist investors

British plcs are coming under increasing threat from aggressive US activist investors due to a big difference in stock market valuations between comparable US and UK companies. A report by Alvarez and Marsal reveals 59 campaigns against UK listed companies last year, more than anywhere else in Europe and the fourth highest in the world.

Corporates here [in the UK] continue to underperform against their global peers… which is demonstrated in the significant discounts seen on UK equities,” said A&M’s André Medeiros.

https://tinyurl.com/4r8v6mdb

 

ISSN 3049-5725