CAR dealer Arnold Clark, Scotland’s largest privately-owned company, is on target to achieve sales of more than £1 billion this year after reporting a strong rise in first-half turnover.
For the six months to the end of June, the Glasgow-based car dealer reported sales of 603.8 million, compared with 505.4m for the same period last year.
The company’s eponymous founder and chief executive said he was confident of breaking through the 1bn barrier for the full year, having missed the mark by just 19m last year.
"Turnover will be up substantially this year - I would say somewhere around 1.1bn to 1.2bn for the full year," he said.
"I would also say we are comfortably on target for profits of around 25m for the full year."
Pre-tax profits for the first half came in just below 13m, an increase of 69 per cent over last year, boosted by buoyant market conditions.
Arnold Clark, along with the rest of the motor industry, suffered two years ago as car prices fell, with the "Rip-off Britain" campaign highlighting far lower prices in mainland Europe. But with interest rates at a 38-year low of four per cent, and no signs of an imminent increase, the reduced cost of borrowing has helped create favourable conditions in the car market.
Mr Clark said: "Although significant downward pressures on used vehicle values continued, much of the uncertainty surrounding new car pricing was diminished and consumer confidence rose substantially."
Meanwhile, February saw the end of the chain’s commitments on Motability Scheme finance, adding around 5m to pre-tax profits.
These commitments had previously required Arnold Clark’s contract hire arm to buy back cars leased to disabled drivers at prices often well above market value.
Changes to the way the programme is run means the dealership chain is no longer responsible for repurchasing the cars, which Mr Clark said resulted in an average loss of 1000 per deal. Despite the strong performance, and in line with previous years, the company’s owners will not be paid a dividend.
Since 1996, around 60m in profits have been retained to fuel the company’s expansion.
Mr Clark, 75, said his 97 dealerships across Scotland and the north of England now employed 5600 people, up from 4700 at the beginning of the year.
The company bought nine dealerships in the first half, on top of five major retailers last year, including the 3m purchase of an Ian Skelly site in Motherwell.
Arnold Clark turned the outlet into its first large-scale "motorstore" and plans to create more.
"We’ve had quite a lot of expansion this year," he said, adding that a further outlet in Newcastle-under-Lyme had been bought since the end of the first half.
Other potential acquisitions are being considered, although Mr Clark, a former RAF mechanic who founded the business 49 years ago, said he did not intend to move into the south of England.
Arnold Clark became Scotland’s largest private company in May, when Aberdeen-based oil and gas services giant floated on the stock exchange, valued at 935m.