7:49 am, August 14, 2023
Profits at car dealer group Citygate Automotive dropped by £2m in 2022, as it reports on a challenging year in its annual results for the 12 months ending December 31, 2022.
In total, the business reported a £7.4m profit before tax in 2022 compared to £9.4m in the previous year.
Turnover was up to £362.4m from £336.3m and the car dealer did report gross profit was also up by £2m, from £51.2m to £53.2m, although slightly down in percentage terms.
In its annual results submitted to Companies House, it commented that many of its brands had lost out in new car market share.
It added that while profit on new vehicles had improved, this had largely been offset by profit in used cars falling.
Both new and used car units sold fell, with the 6,243 new cars sold down 541 on the previous year and the 6,506 used cars sold down 382.
Citygate Automotive’s board reported: ‘In this very challenging new car market the Volkswagen, Seat and Skoda brands lost market share, more severely impacted by the semi-conductor crisis disrupting the supply of new vehicles.
‘The Kia brand gained share in the market, growing registrations to a record 100,200 vehicles and increased market share to 6.2 per cent.
‘The light commercial vehicle segment declined by 20.6 per cent to 282,000 units, and within this VW Commercial Vehicles outperformed the market and grew market share to 10.0 per cent to be the second largest brand in the market.’
However, service hours and bodyshop hours were both up and parts turnover had increased £1.9m.
The board wrote in its strategic report: ‘Turnover grew £26.1m (7.7 per cent) 10 £362.4m in 2022. in vehicles sales, favourable mix with higher average prices offset the volume declines in both new and used car volumes, in aftersales, there was a solid performance across all the main departments with service hours up 2.1 per cent, bodyshop hours up 21.7 per cent and parts revenue up 15.5 per cent.
‘The supply constraints on new and the favourable mix of new products continued to assist margin retention, resulting in improved gross profit on new vehicle sales.
‘However, this was more than offset by a significant decline in used car profitability as the market corrected from the extremely high prices of the post pandemic market in 2021 to a more normalised level.
‘Aftersales profitability improved 13 per cent year-on-year but despite this the combined gross margin declined 50bps year on year to 14.7 per cent.
‘The additional revenue combined with these lower gross margin delivered gross profit for 2022 of £53.2m, up £2.0m (up four per cent) year on year.’
It added: ‘Distribution expenses increased by £1.8m to £26.9m, an increase of 7.29, driven mainly by increased staff and vehicle costs.
‘Administration costs increased by £2.6m to £20.5m, an increase of 14.8 per cent, driven by the ongoing investment in IT projects to digitise processes and increase operational efficiency.’
Pictured top: Citygate Volkswagen West London
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