ONE of the region’s largest privately-owned car dealerships plans to grow its portfolio of franchises after securing a multi-million-pound financing deal.
SG Petch, which has five dealerships in Darlington, Middlesbrough, Durham, Richmond and York, has successfully ridden the recessionary storm and is now on a firm footing for future growth.
The Darlington firm was established in 1978 by Stephen Petch, and now employs more than 200 permanent members of staff.
It was originally a single franchise dealer for Daihatsu in Bishop Auckland, but is now among the North East’s largest independent car dealerships, and ranked 62 in the North East Top 200 Companies in 2011.
With annual turnover exceeding £115m, the firm sells new and used vehicles for several of the world’s leading manufacturers, including Nissan, Seat, Mazda, Kia and Fiat.
Simon Rees, financial director at SG Petch, said the effects of the banking crisis in 2009 has made it difficult for motor dealerships to expand in recent years.
“The banks simply weren’t lending and that left a lot of smaller dealerships in trouble,” he said. “Fortunately, we had a fantastic period in 2009-10 with the scrappage scheme, and we’ve done well since, despite the difficult economic climate, due to our good portfolio of franchises in key locations.
“Since the banking crisis it has been hard to think about expansion due to a lack of funding and a lack of confidence in the motor trade. Nevertheless, our business has demonstrated resilience in its core operating model through the current challenging climate.
“Changing all of our banking and financial arrangements was a decision we did not enter into lightly, but Santander were keen to develop our strategy and growth plans.
“We want to improve our existing sites as much as we can, and if any opportunities to expand the business come along, we are in a financial position to do so. We haven’t got any dealerships in Newcastle and Wearside, so that is a natural area for us to move in to, as well as perhaps other areas in Yorkshire.
“Our success in recent years is down to having good locations at big sites with plenty of parking and choice for our customers. A lot of smaller dealerships have struggled in recent times, whereas we have been able to develop a strong reputation in the region.”
Stockton-based Archers Law advised SG Petch on switching all of its banking and financing arrangements to Santander.
David Adams, who specialises in corporate and commercial deals at Archers Law, said: “This was a very complex and high-value re-financing deal with a degree of risk. There were a wide range of parties involved on both sides and, by working together, we were able to successfully complete what were complicated financial arrangements on behalf of our client.”
Graham Moore, relationship director at Santander Corporate Banking, said: “We have worked closely with Stephen and the management team at SG Petch and have been impressed with their strong market knowledge and tight control within the business.”