John Clark Motor Group grows turnover by 5% to £703m

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Turnover at The John Clark Motor Group (JCMG) has increased by 5% to £703m from £667m with profit before tax growing by 1.2%.

The trend in growth continued with the new and used vehicle volumes reaching record highs during 2016. New unit sales volumes rose by 4% to 14,712 units and used volume grew by 10% to 13,062.

Both results have bucked the general trend of the Scottish market, which saw total car registrations rise by only 0.2%.

These confirm continued growth and investment as the family owned company strengthen its position as one of the UK’s top 20 motor trade businesses, having seen turnover double in the last five years.

In aftersales, JCMG achieved growth in turnover for the eleventh consecutive year across each of the service workshops, accident repair centres and parts operations.

Group Chairman, John Clark, commented:
“The Group’s primary aim in 2016 was to see consolidated growth from expansion in prior years and, despite the continued downturn in the North Sea Oil Industry and resultant impact on the Grampian Region, to maintain positive momentum towards our key strategic objectives.

We continued to focus on developing and extending the relationships with our existing franchise partners in the North, East and central belt of Scotland. As well as to consider potential opportunities which were presented to us by others and lead us to open Peugeot, Renault and Dacia in Aberdeen.

“Whilst the early months saw encouraging trading results, the period leading up to and after the Brexit Referendum saw a marked reduction in our vehicle sales performance. Consequently, some dealerships experienced operating profits under pressure, against a background of challenges caused by changing market dynamics and declining consumer confidence.

Therefore, it is pleasing to again report record turnover, with new and especially used vehicle sales growth that saw our market share improve again. Our customer base has never been bigger and our aftersales operations continue to get stronger.”

During the course of 2016 the number of people employed in the group rose by 6% to 1,206 from 1,139, which can be attributed to the new Renault, Dacia and Peugeot franchises, as well as some increases in head office staff, required to support business growth.

Group Managing Director, Chris Clark, commented:
“Throughout 2016 our investment activities saw significant sustained spend on staff training including our in-house management development, apprenticeship and trainee programmes. I was therefore delighted in January 2016 to see the group named as winners of Best Training and Development Programme at the annual Automotive Management Awards. Placing us ahead of some of our dealer group peers and some of the leading manufacturer franchise training departments.
Another area that saw considerable investment was property, with the completion of our Dundee Audi and Volkswagen Aberdeen showroom refurbishments. 2017 has and will continue to see a focus on property as we will open an all new state of the art Pentland Jaguar Land Rover dealership at Fort Kinnaird in October, which is designed to service customers that live East of Edinburgh City.

Furthermore, we have recently started work in Dundee for the relocation of John Clark BMW, MINI and Motorrad, as well as a brand new Jaguar and Land Rover dealership. Further property investment is planned for 2018 and will be announced in due course.”

John Clark added;
“We recognise that the wider outlook for 2017 is one of ongoing political uncertainty with a stable but fragile economy. The market remains challenging and April brought added overhead costs in the form of a notable commercial property rates increase and the introduction of the Apprenticeship Levy.

However, our midyear management accounts show 7% further growth in turnover and our net profits are ahead of both budget and prior year comparatives. We retain a strong and supportive relationship with our funding partners and our finances are in good shape, to allow us to not just face up to the added uncertainty of post Brexit Britain but to grow through it and again pursue further opportunities.”

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