EASTERN Holdings, owner of one of Scotland’s biggest cluster of car dealerships, has its foot firmly on the gas with plans for two new showrooms on the outskirts of Edinburgh after booking a second year of record sales and profits.
The privately-owned company, which represents brands including BMW, Mini and Mercedes-Benz, is driving ahead with the construction of new dealerships for its Mazda and Nissan franchises. They will be located on a three-acre site at the group’s “luxury car village”, next to the Newbridge roundabout.
Development work on the land, which was originally designated for supermarket use, is due to commence shortly with completion scheduled for April next year.
Confirmation of the expansion plans came as newly-published annual accounts revealed bumper sales in the year to 31 December.
Writing in the strategic report, the directors also said they were “very satisfied” with the company’s financial performance to date this year.
Turnover rose by 18 per cent to just over £463.6 million in 2014, compared with the previous 12 months. The number of new and used vehicles sold during the year increased by 10 per cent while aftersales revenues were up by 5.5 per cent.
Profit before tax grew by almost £1m to just over £7m, in an industry that often works on notoriously slender margins. Group operating profit came in at about £8.7m, up from £7.7m.
The report noted: “Overall, the directors are pleased with the group’s performance for 2014 considering 2013 was a record year… in terms of both turnover and profit.”
However, the strategic report also pointed to some exceptional costs incurred during the year.
“With the final demise of the Saab franchise, the group decided to close its facility in Perth. This location also represented Alfa Romeo and Isuzu.
“Collectively the group experienced significant administrative costs associated with the closure of the above facility and also the closure of its old Volkswagen dealership at Gorgie Road, Edinburgh.
“The group also had significant start-up and relocation expenses associated with the opening of its new Volkswagen dealership and the new pre delivery inspection centre at Broxburn.”
The new 33,000 square foot Volkswagen dealership opened at the main Newbridge site last October.
The firm said that to date it had seen “significant” growth in both new and used vehicle sales. The car village now accommodates BMW, Lexus, Mercedes-Benz, Mini, Smart, Toyota and Volkswagen, alongside a Car Deal Warehouse used car facility.
During the year, Eastern Holdings’ headcount rose by almost 40 people to just under 1,000. The highest-paid director received £263,000, up from £206,000 the year before.
An interim dividend of £1.5m was paid, compared with £1m in 2013 and the directors are not proposing a final dividend.
Last week, it emerged that new car registrations had gathered momentum last month in Scotland, having shifted into reverse gear in May, as sales across the UK hit a record high.
Latest industry figures showed that 21,576 vehicles were sold in June, a surge of more than 12 per cent on a year ago, with Ford’s Fiesta topping the tables on both sides of the Border.
Other best-sellers included the UK-built Mini and Nissan Qashqai.
Mike Hawes, chief executive of the Society of Motor Manufacturers & Traders, said: “It is still a great time to buy a new car in the UK, and it is encouraging to see more consumers choosing British models.
“This is important for the wider economy with 799,000 people now employed across the UK automotive sector, including retail. We anticipate a flatter second half of the year as the market finds its natural running rate.”