John Martin boosted by £1.3m sale of showrooms

PROFITS at car dealership chain John Martin have moved up a gear following the £1.3 million sale of three of its showrooms and a series of repair contracts with big motor insurers.

The group - which trades under the Belmont and Murray brands - recorded a pre-tax profit of 2.6m for 2010, up from 303,000 in the previous 12 months, according to accounts filed at Companies House.

Turnover reversed to 129.9m from 146.9m following the disposal of its showroom in Stirling and the sale of its Vauxhall dealerships in Edinburgh and Aberdeen to rival Peter Vardy.

Vardy - the grandson of legendary car salesman Reg Vardy and son of Sir Peter Vardy - had previously bought Martin's BMW and Mini franchises when setting up his own firm in 2006.

The sale of the franchises lowered John Martin's headcount to 480 from 614 and cut its staffing bill to 14.1m from 16.7m. Having made a profit of 1.3m from the sale of the showrooms, the group booked a one-off restructuring cost of 202,000.

Edinburgh-based John Martin sells a range of marques from up-market models such as Aston Martin, Lotus and Rolls-Royce through to mass-market brands like Kia, Peugeot and Vauxhall.

The family-owned firm decided not to pay a dividend for a second year running, instead transferring profits to reserves.

Company secretary Patrick Sweeney said: "2010 was a challenging year for the group and the motor trade generally as the motoring public adjusted to the consequences of the financial crisis and recession in 2008-9."

Sweeney said that trading in the first five months of 2010 had been ahead of forecasts, buoyed by a record-breaking March and overcoming a slow start caused by the harsh winter weather.

Following the restructuring in the second quarter, the car markets dipped again in September and October, with further extreme weather denting sales towards the end of the year.

Sweeney added: "It is expected that the next few months will be challenging, but that the steady recovery in economic growth will feed through to slightly-improved confidence and demand in the second half of 2011. In the early part of the year, the group has added new franchises at our Aberdeen, Edinburgh and Glasgow sites, which the directors believe will drive improved profitability.

"The group continues its significant long-term contracts with major insurance providers to carry out accident repair work in a number of locations. These contracts have had a beneficial effect on the profitability of our accident repair company."

The group's highest-paid director, likely to be managing director Gordon Nisbet, received 171,000, up from 146,000.

John Martin is the latest Scots car dealer to post results. Last week, Grangemouth-based John Weir - which specialises in Mercedes-Benz - reported profits had accelerated to 424,000 from 134,000 in the year to 31 October on the back of a 9.8 per cent rise in sales to 91.5m.Figures out last week showed Scottish new car registrations fell by 13.5 per cent in July, compared with a 3.5 per cent drop for the UK as a whole.