Signs of recovery as Kerr & Smith gets back on the road

Kerr & Smith - the family-owned car dealer with Fiat and Vauxhall showrooms in Ayr, Cumnock and Glasgow - motored back into the black last year after trimming its headcount and cutting its costs.

Accounts filed at Companies House showed that the return to a modest profit of 81,000 in the year to 31 July, from a loss of 232,000 in the previous 12 months, came despite sales falling by 8 per cent to 25 million.

The firm, which was founded in 1975 by directors Bill Kerr and Jim Smith, cut its headcount from 178 to 169, which allowed it to trim its wage bill from 3.8m to 3.5m and helped to combat pressure on margins.

The group said it had also reduced its stock of commercial vehicles, which had allowed it to cut its interest payments.

Writing in the directors' report, Smith said that, while the "trading highlights of 2005, 2006 and 2007 are not anticipated to return", he does expect business to improve over the next two years.