Debt cut ahead of Brexit downturn
27 March 2019
The biggest car retailers are future-proofing themselves against any post-Brexit downturn and have reduced debt by more than a fifth over the past year, according to a new report from accountancy firm, UHY Hacker Young.
The top 100 groups have cut debt by 22%, from £12.5 billion to £9.7bn firm and significantly improved the financial strength of the sector ahead of the expected Brexit related slowdown.
Paul Daly, partner of UHY Hacker Young said the businesses have been steadily de-risking since the 2016 referendum expecting big-ticket purchases like cars to be among the first victims of any drop in consumer confidence. The collapse of diesel sales has accelerated these preparations.
He added dealerships have cut debt by reducing capital investment, selling off property assets (through sale and leasebacks) and focusing more on cash generation. In some cases, non-core overseas assets have also been sold.
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