John Clark Motor Group, the family-owned and run north, east and central Scotland car sales business, has said 2019 saw a continued background of marketplace challenges caused by economic and political uncertainty, which led to reduced consumer confidence.

However, Aberdeen-based JCMG said it saw positive results despite the challenging environment and goes on to talk of having generated improved results in 2020.

John Clark, chairman, said: “In addition to the economic and political pressures, dealer groups were under sustained demand to deliver high new car sales targets which resulted in self registrations and increased interest costs. As a result, many leading dealer groups reported a decline in turnover during 2019, but the strength and mix of JCMG’s franchise portfolio resulted in JCMG holding our turnover at £821m.

“The first half year was ahead in terms of turnover, whereas the remaining six months proved more challenging, mainly due to the September Real Driving Emissions legislation change, which had an impact on new vehicle product supply during a new car registration month.”

The group said in contrast to the registrations trend across Scotland which saw a 5% decline, JCMG’s new vehicles sales volumes grew by 1% to 14,167. The group also saw 2% growth in used vehicle sales of 16,333 units and 8% turnover growth across their aftersales operations.

It said that as a result of this growth, Earnings Before Interest Taxation Depreciation & Amortisation (EBITDA) is highlighted as having risen from £12.6 million to £12.75m representing a Return On Sales of 1.5% despite the various external challenges.

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Chris Clark, group managing director, noted: “During 2017 and 2018, the group continued to invest in its Jaguar Land Rover franchises with investment in Edinburgh East, the acquisition of Stirling and the opening of a dealership in Dundee plus the redevelopment of the Elgin dealership, which resulted in growth in turnover and profitability for this division. In addition, the acquisition of Volvo Cars in Edinburgh and Dundee in 2018 saw 2019 as then the first full year of trading and an encouraging contribution to the group’s performance.”

Quarter one, 2021 will see the group complete the relocation of the BMW and BMW Motorrad business in Dundee to a new state of the art premises. Both MINI and Volvo in Dundee will also see significant investment and expansion. Further investment is then planned with the redevelopment of Land Rover at Newbridge in Edinburgh, alongside an all-new site for Volvo Edinburgh also at Newbridge.

John Clark also said: “We continue to progress our 2021 and 2022 facilities investment plans, as well as seek to support our colleagues and customers as we navigate through the ongoing Covid-19 pandemic.  From a financial perspective, we have a strong balance sheet and remain profitable, so we are in a robust and highly liquid position. We plan to use this and maintain our industry leading position by continuing to seize and build upon the right acquisition and investment opportunities.”

HeraldScotland:

 

In separate accounts, its John Clark Aberdeen (Limited) business reported widening local losses.

This part of the business also updated in its annual report to December 31, 2019 about post-year events including the coronavirus pandemic, and said that after lockdown there had been "strong trading positives”.

It said that “2019 saw a continued background of challenges caused by political and economic uncertainty which led to reduced consumer confidence and commitment to spend, versus high new vehicles targets which failed to fully reflect the marketplace pressure and changes”.

“Our resultant operating margins came under sustained pressure throughout the year, especially in the second quarter when a market-wide realignment on used car prices saw unexpected losses of part-exchange stock disposals.”

John Clark (Aberdeen) Limited's loss before tax was £2.3m, against £109,000 the year before. The loss after tax was £1.87m, against £90,000 in 2018.

It said: “As a priority during the pandemic we have sought to support our colleagues, customers and community throughout.

“Prompt investment in PPE materials and social distancing measures allowed our workshops to remain open to best assist the efforts of our emergency services, NHS and other key worker customers. As a group, we supported both colleague and corporate efforts to assist local charities and health authorities including the free of charge provision of PPE materials as well as the use of delivery vans and cars."

Also in its Aberdeen report, it said it recognises “the continued UK-wide background of ongoing political uncertainty” but it continues “to be confident of trading profitably”.