THE Phoenix Car Company has seen losses more than treble after racking up costs linked to the closure of its Honda dealership in Grangemouth last year.

But owner John McGuire insists the business has responded positively to the setback, declaring that the company is on track to return to profit in its current year.

Mr McGuire, who founded Phoenix in 1993, added that the closure last November, sparked by a drop in Honda sales across the UK, had a negligible effect on jobs. The only person to leave had done so to start their own business, with the remaining staff given roles elsewhere in the company.

Phoenix, which has 13 showrooms in Scotland, selling under seven marques, booked a pre-tax loss of £747,993 for the year ended January 31. That came after it made a loss of £208,749 the year before, accounts newly filed at Companies House show.

Mr McGuire, a long-standing Labour Party supporter, said the Grangemouth closure had led the company to book trading losses of more than £400,000 for the site.

It also resulted in extraordinary costs of around £200,000.

Mr McGuire explained the backdrop to the closure was the loss of market share endured by Honda in the UK in recent years, noting that it had gone from registering over “100,000 units per annum in the UK” to around 50,000 last year. It meant Phoenix could no longer justify running two showrooms in the area, with Honda still to reclaim the level of market share it previously commanded.

Mr McGuire said: “We had operating costs and we had extraordinary costs as well that were associated with the closure, all of which we had to put through last year, which meant that unfortunately we are showing a bit of a loss.

“However, the good news about that is that we find ourselves in a position this year that we have had the best opening trading for five years. It has left us in a very healthy position this year, and we have turned round the situation where the Grangemouth/Stirling operation, which had been losing money, is now making significant profits and contributing to the group.”

He added: “We have moved the balance sheet forward in nine months by over £700,000 and we look to build on that.”

Mr McGuire declared the prospects for Honda are improving, stating Phoenix should see the benefit next year from the latest versions of the HRV, Jazz and Civic Type R next year, as well as the NSX, due in showrooms in 2016.

Away from Honda, he said the firm’s Kia and Hyundai dealerships delivered profits last year.

He noted high levels of interest in the hybrid version of the Mitsubishi Outlander, adding that he has high hopes for the family-oriented ASX model when it comes in next year.

Mr McGuire believes Glasgow City Council deserves praise for supporting the roll-out of charging points and suggested such facilities should be factored into new-build homes.

Phoenix, which saw turnover slip by £3m to £136m last year, adopted the living wage and restructured the way sales executives are paid last year.

It noted that both moves, alongside the introduction of auto-enrolment, will help staff retention, while acknowledging that they would lead to higher administrative costs.

According to the accounts, Phoenix employed an average of 353 staff last year, down slightly on the 357 it had in 2014, with staff costs rising to £10.2m from £9.7m. Directors’ remuneration increased to £563,693 from £323,167.

Meanwhile, Mr McGuire said loyal Volkswagen customers are feeling a “betrayal of trust” following the emissions scandal. He supports the introduction of “real life” emissions testing for cars.