Car dealership group Peter Vardy sees profits gain speed
Peter Vardy, the Motherwell-headquartered car dealership group, has hailed accelerating profit in 2019, as it pivots towards being known as a mobility provider.
The business saw increased core earnings of £11.3 million, a 2.4 per cent return on sales, from £10.75m, a 2.3 per cent return on sales, in 2018.
Turnover revved up by 0.5 per cent to £471.2m, with the firm mainly attributing the growth to robust aftersales revenue across all franchises in comparison to the previous year. Profit before interest and tax amounted to £7.3m, up from £6.7m.
The group operates six volume and six prestige dealerships, two used car supermarket operations and a heritage cars dealership throughout Scotland, with franchised businesses representing BMW, Mini, Jaguar Land Rover, Porsche, and Vauxhall.
Overall gross profit margins remained consistent at 12.7 per cent, a “gratifying result in a market where new car margins have been under pressure as manufacturers seek to drive volume,” the firm said.
Underlying return on sales based on operating profit, a key industry benchmark, was 1.7 per cent, compared to 1.4 per cent in 2018 – and before amortisation and donations made to the Peter Vardy Foundation. The firm said the industry average for the same period was 0.81 per cent.
“And while the industry average profit per dealership in 2019 was £166,000, the Peter Vardy Group delivered average underlying profits of £581,000 per dealership,” the business said.
Chief executive Peter Vardy said: “We were really pleased with our performance in a challenging market and we are committed to reinvesting all surpluses back into the business for future acquisition, property redevelopment and organic growth.
“As well as seeing a strong performance we continued to focus on our 2020 vision of becoming a world-class motor retail organisation as measured by our partners, our guests, and the communities in which [we serve].
“Our ambition is to become the number one digital automotive retailer in the UK, and we have continued to invest in digital software, sales structures and process throughout 2019 to ensure we maintain our competitive advantage.
“We have worked closely with our sister company Silver Bullet as a key partner in improving our digital platforms and our goal is to retail 50 per cent of annual sales via our e-commerce channel by 2025.
“Throughout 2019, we conducted extensive research into both the motor trade as a whole and on future trends, to create our ten-year 2030 plan. Establishment of our 2030 strategy will lead to the group transitioning towards becoming more widely defined as a mobility provider rather than limiting our focus narrowly to that of a traditional motor retailer.”
The group also said it is committed to “innovative” reward and remunerations schemes, leading to 224 new partners being enrolled in the group share option plan.
The Peter Vardy Foundation made donations of more than £500,000 to good causes including supporting local Scottish children charities in 2019. The group was set up as a single dealership in Perth in 2006, and has grown to 14 dealerships across Scotland with more than 800 staff.
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