TRADING at Peoples Motor Group has stabilised after falling back from a record year in 2010, with founder and chairman Brian Gilda saying he is “delighted” with the group’s performance in a difficult and challenging market.
Pre-tax profits at Peoples, which operates six Ford dealerships from its Edinburgh headquarters, fell by about half from £3.04 million to some £1.6m which was still the second-highest return by the group since it was formed in 1983.
The company invested more than £1m from the previous year’s profits in rebuilding the Speke dealership opposite John Lennon airport in Liverpool. It also upgraded IT, telecoms and customer relationship management systems across the group.Despite the continuing impact of higher unemployment, pay freezes, rising fuel costs and general economic uncertainty, trading in the first half of the current financial year has remained steady. Gilda added that the outlook was “reasonably positive” for the important March period when new number plates are introduced.
“Looking at the six months to the end of January, we are slightly ahead of last year,” he said. “Not by a lot, but by a little, and I would rather be ahead than behind.”
The company has also yet to see the benefit of product launches by Ford due later this year. These include the introduction of the more efficient Fox engine that will power the new Focus range, as well as the electric version of Ford’s light commercial Transit vans.
Commenting on the full-year figures, Gilda said Peoples had accepted early on that it would never repeat its 2010 performance after the government’s VAT increase and the end of scrappage schemes to support sales of more efficient new cars.
Revenues during the year edged 2.2 per cent higher to £144.3m, reflecting an improvement in fleet sales and the business-to-business sector.
“Customers in the fleet business are feeling more confident,” Gilda said. “Retail customers, of course, will need to feel a lot better about themselves before they come out of the cupboard.”
Majority-owned by Gilda, Peoples employs nearly 400 staff. Its Scottish dealerships in Edinburgh, Falkirk and Livingston account for about a third of employees, with the remainder working out of three sites in Merseyside.
Despite the relatively robust performance, Gilda said the group was keeping a close eye on costs amid the continuing market uncertainty.
Unlike 2010, when Peoples trimmed its headcount by some 7 per cent, latest efficiency measures are not expected to result in any job losses. The focus will instead be on the group’s other major area of cost: marketing and advertising.
“One of the things we are looking at is how to make our marketing spend more efficient,” Gilda said, noting the group’s recent significant investment in IT and telecoms systems.
“Any costs that we don’t need, we won’t be holding on to.”