Peter Vardy profits drive ahead on investment push

Car dealer Peter Vardy has seen a multi-million pound investment programme pay off after full-year sales and profits motored ahead.

Peter Vardy's stable of brands includes Porsche. Picture: Contributed

Accounts for the Glasgow-headquartered group, which runs showrooms selling cars from BMW, Jaguar, Land Rover, Mini, Porsche and Vauxhall, reveal that sales rose by 11 per cent last year to £437.2 million.

Operating profits before amortisation and donations totalled £12.1m, up from £7.8m in 2014. No dividend was paid.

Underlying returns on sales – a key benchmark in an industry renowned for its tight margins – rose to 2.7 per cent from 2 per cent a year earlier. The industry average for the same period was just over 1.2 per cent.

Meanwhile, average profit per dealership at the group was a little over £1m compared to an industry average in 2015 of under £200,000.

Peter Vardy, which has some 800 staff, said it had invested heavily in “state-of-the-art” premises to support internal and manufacturer growth plans over the next five years.

During 2015 it invested £6m in Porsche Aberdeen while a new Jaguar Land Rover showroom in the city is scheduled to open next month.

Chief executive Peter Vardy said: “The group is performing ahead of its 2020 strategy after the first year and has focused its actions on six key objectives: colleague engagement, customer, or guest as defined in our business, satisfaction, developing manufacturer relationships, achieving financial performance targets, evolving digital strategies and giving 10 per cent of profits back to charity.”

Last month, Peter Vardy Group distributed share options to its hundreds of employees as part of its “partnership programme”.

The firm operates six Vauxhall volume dealerships in Aberdeen, Perth, Kirkcaldy, Edinburgh, Motherwell and Dalgety Bay.

In addition, it operates five “prestige” dealerships selling Jaguar, Land Rover, Porsche and BMW-Mini vehicles as well as Scotland’s biggest indoor used car showroom, CarStore, at Hillington, Glasgow. Another CarStore supermarket is set to open in Dundee.

Meanwhile, Macklin Motors owner Vertu has assured investors that its performance for the full year will be in line with market expectations as it played down the potential impact of Brexit on the industry.

In a trading update to coincide with its annual shareholder meeting, the listed motor dealership said: “The UK represents the second biggest market for new vehicles in the current EU and thousands of continental European jobs are reliant on a continuation of this trade with the UK.

“Consequently, the board believes that manufacturer partners are likely to be keen to support UK retailers through any period of uncertainty.

“Whilst sterling has declined against the euro following the referendum result, it remains at levels above the lows seen in 2008/9, and more recently throughout much of 2013, and at levels which the board believes remain attractive for European manufacturers to export vehicles to the UK.

“This should help to underpin the UK new car market which is currently at record levels.”

Vertu is the fifth-largest car retailer in the UK with a network of 132 sales outlets.