PETER Vardy, the grandson of legendary car salesman Reg, has seen his eponymous dealership chain post higher profits for the first three months of the year than in the whole of last year as demand for his BMWs, Minis and Vauxhalls accelerates.
Vardy has spent the past year restructuring his business following the takeover in 2010 of Vauxhall showrooms in Aberdeen and Edinburgh.
Those changes have included a debt-for-equity swap to turn loans from his father, Sir Peter, and his mother into shares in the business, which Vardy plans to buy back in the coming years.
Turning the debt into equity has strengthened his business’s balance sheet, giving him the financial firepower to push ahead with his acquisition strategy, which is likely to see him buying a showroom each year over the next five years.
Vardy is following in a long family tradition in the motor trade. Reg Vardy set up a haulage business near Durham in 1923 and opened his first car dealership in 1945.
Four years later, he was appointed as a dealer by Ford and steadily grew his business. His son, Peter, joined the family trade at the age of 16.
Under Sir Peter – who was knighted in 2001 – the firm grew to 100 showrooms and 6,000 staff, with a turnover of about £1.7 billion a year. He sold Reg Vardy to Pendragon for £506 million in 2006 and stood down as chief executive, with his son leaving his post as manager of the Rossleigh Jaguar franchise in Edinburgh.
Father and son then set up Glasgow-based Peter Vardy Limited (PVL) in 2006 and now have seven BMW, Chevrolet, Mini and Vauxhall dealerships spread across Aberdeen, Edinburgh, Kirkcaldy, Motherwell and Perth.
Ahead of accounts being filed at Companies House, Vardy revealed that PVL turned over £207.9m in 2011, up from £181.8m in 2010.
Operating profits were flat at £2.1m after Vardy used cash to make changes to the business but, during the first three months of this year, he has already reaped the benefits of that investment, with operating profits topping £2.2m.
A massive rise in used car sales – already 168 per cent ahead of this year’s target – and strong growth in its servicing and parts business were hailed for the profits boost.
Vardy said: “Used car sales have really taken off, mainly on the back of our increased efforts to source stock. We are also seeing reward for our efforts to offer a quality approach to car retailing with a 3.6 per cent return on sales, which, within our industry, is a very impressive result.
“I’m pleased sales continue to go well into this quarter.”
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