MOTOR dealer Holiways has seen its profits almost half following the withdrawal of the scrappage scheme and the impact of high fuel prices.
Sales for the 12 months ending April 30 2011 for the North East Ford dealership totaled £39.1m, down from £40.4m in the previous year, while pre-tax profits dropped from £511,348 to £270,808.
The decline is in stark contrast to gains during the previous year, which saw the company grow its pre-tax profits from £317,455 to £511,348, when an uptake in its after-sales service made a “significant” contribution to its overall performance.
However, the firm said that it was satisfied, given the problems of ever squeezing profit margins which have blighted the motor trade over the last year. It mentioned that the withdrawal of the scrappage scheme, high fuel prices and high insurance excesses had resulted in a reduction in car sales, with a competitive market impacting on profit levels.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that there were 183,125 vehicle registrations in the UK during June, which is down 6.2% on the June 2010 total and is the 12th consecutive monthly decline in sales.
However, Holiways can take some comfort in the fact that the Ford Fiesta remained the best selling model in June and over the year-to-date, followed by the Focus.
The company, which is based in Newton Aycliffe has three other County Durham outlets at Hartlepool, Durham, and Bishop Auckland.
The firm said in its annual results: “Due to the competitiveness of the market, the company has seen a decrease in gross profit percentages.
“The directors are satisfied with the overall results and recognise the contribution made from both managers and staff in achieving these results in a very competitive and tough market place.”
The firm, which employs around 160 staff, said: “A great deal of focus was placed on controlling expense during the year to compensate for the declining margins and as a consequence the company continues to report a healthy operating profit.
“The directors do feel that the early signs for 2011/2012 are encouraging and with continued focus on controlling costs they are confident of another satisfactory year in 2011/2012.”
Due to competitiveness of the market, the company has seen a decrease in gross profit percentages.
