Arnold Clark drives up sales as founder sees his salary rise 30%

SIR Arnold Clark was awarded a 30 per cent pay rise last year, taking his annual earnings to more than £1.3 million as his eponymous car dealership grew sales but suffered a fall in profits.

Newly-filed accounts for his company reveal that the firm's highest-paid director, assumed to be octogenarian Clark, received 1,354,000 in 2007, up from 1,047,000 the year before – one of the largest boardroom pay packets in Scotland.

In 2005, the highest-paid director banked nearly 1.7m.

The company – Scotland's biggest private firm by turnover – revealed earlier this year that annual sales in 2007 had jumped 11.2 per cent to almost 2.1 billion, boosted by a string of acquisitions.

However, pre-tax profits slipped 8.2 per cent to 70.1m after the 2006 result was affected by a one-off gain. Operating profits held steady.

According to the accounts, total boardroom pay at the group, which operates more than 140 showrooms across the UK, amounted to 3,083,000 last year, up from 2,322,000 in 2006.

Chairman and chief executive Clark waived his entitlement to a dividend, although the business paid out an interim dividend totalling 450,000 to other shareholders. Staff and pension costs rose by 11 per cent to 176.2m as the headcount grew by more than 350 to almost 8,000.

Writing in the annual report, Clark warned that 2008 would be "a challenging year for motor retailers".

He added: "Our intention is to maintain growth through a mixture of acquisitions and greenfield developments, whilst ensuring that the group is extremely well funded."

During 2007, Arnold Clark's sprawling dealership network sold 73,887 new and 120,396 used cars – year-on-year gains of 10.3 and 7.4 per cent respectively.

The group also completed its largest acquisition to date, with the takeover of Newcastle-based Patterson Motor Group.

Although the value of the deal was not disclosed, Patterson's turnover had topped 250m and the acquisition brought a number of Ford and Seat dealerships into the Arnold Clark fold.

In 2006, the Scots company swallowed Glasgow-based Harry Fairbairn in a multi-million-pound deal, adding the BMW and Mini franchises to its portfolio.

Clark, who was knighted in 2004 for his contribution to the motor industry and the Scottish community, opened his first showroom, in Glasgow, in 1954. He was unavailable for comment yesterday.

Britain's car dealers are starting to feel the pinch from a triple whammy of tighter credit markets, a general consumer slowdown and high fuel costs.

Industry figures published earlier this month revealed the worst August sales figures for 42 years.

New-car registrations in the UK fell by nearly 19 per cent on a year earlier as drivers postponed purchases because of fears over the economy.