Peoples reports best-ever results as drivers release purse strings

Falkirk-based Peoples made a profit before tax and preference share dividends of nearly £8 million for the year ended July 31, up from £3.01m the year before, as it took advantage of pent-up demand from consumers after lockdown. Turnover increased by 20 per cent to £289.5m, accounts newly filed at Companies House show.

Mr Gilda, who established Peoples 38 years ago, told The Herald that the “numbers are great” and highlighted “a lot of traction” across the company's new, used, commercial vehicle and after-sales markets.

Noting that Peoples had “absolutely” benefited from pent-up demand, he said: “When lockdown finished… we had a huge spike. It was almost as if someone had opened a door and the public rushed in.

“I guess you could understand why because they had been locked up for a long while, couldn’t go on holidays, had disposable income, and we were pretty high up the list as it happens for a purchase decision.”

Mr Gilda, who underlined his gratitude to Peoples’ “loyal customers”, added: “I’m lucky I have some great people working for me who put these things together.”

Peoples underlined the contribution of its online offering to last year’s accounts, billing it a “game changer” for the company because it has widened its customer base. But Mr Gilda said many consumers continue to visit dealerships to speak to advisers before making purchasing decisions.

While Peoples capitalised on resurgent consumer confidence in the period covered by its latest accounts, Mr Gilda warned the current semiconductor shortage that is affecting a range of industries would limit growth this year. The shortage will curb the number of vehicles Peoples can access to sell, and Mr Gilda said he does not expect the situation to be remedied until well into next year.

He said that until the shortage is resolved, “we are going to be short of cars, short of new cars, short of vans, short of used vehicles [and] that then will have an impact on after-sales.”

“We’d love to do the same numbers [as last year], it is just physically going to be impossible,” he added.

“The semiconductor is the centre-point of this – without that stuff, they simply can’t get the vehicles built. Certain manufacturers, not Ford, actually closed down plants and stopped production completely. That is the epicentre of the issue for us… it will take a while before it corrects itself.”

Asked about the progress of electric vehicle sales, Mr Gilda forecast that the market will develop “in stages”.

He noted that a “tsunami” of new plug-in hybrid and fully electric cars is poised to come on to the market in 2024 and 2025, which will “dramatically” change the vehicles people drive. But he said some consumers will hold off purchases for electric cars until their “anxiety” over vehicle ranges eases. That worry will persist until sufficient charging points are in places across the country.

Prices will “moderate” amid efforts to reduce the cost of producing batteries, added Mr Gilda, who highlighted Ford’s development of a battery plant in Halewood, Liverpool, which will replace its current transmission facility.

The Peoples Ford electric range is currently limited to the new electric Mustang Mach W and a new electric Transit, he said.

Ultimately, Mr Gilda believes the move by consumers to electric vehicles will be a “gradual process”.

Peoples operates six showrooms, three in central Scotland and three in Liverpool, and employs 378 staff. Mr Gilda said it made just one redundancy amid the fall-out from the pandemic, “which was unavoidable”, having utilised the job retention scheme.

Meanwhile, Mr Gilda expressed a desire for Peoples to improve the diversity of its workforce, noting that the car industry continues to be male-dominated. He said his daughter Nicola, a senior director with the business, was leading efforts in this area.