– £30m annual price surge
– Earnings recuperate post-cyber assault
– Aftersales and auctions thrive
– £30m annual price surge
– Earnings recuperate post-cyber assault
– Aftersales and auctions thrive
AM100 retail big Arnold Clark is going through a £30m rise in annual prices following the tax modifications unveiled in Chancellor Rachel Reeves’ first Finances – a transfer it warns may have a big influence on the motor retail sector.
The figures have been disclosed in Arnold Clark’s newly filed annual accounts, which present the group generated £5.1bn in income in 2024, up from £4.9bn the earlier yr.
Pre-tax earnings additionally rose 4.3% to £120.7m, recovering from the earlier yr £161m when a cyber assault and inflationary pressures dented earnings.
In mild of the stronger efficiency, the family-owned enterprise elevated its annual dividend payout from £15m to £21.9m.
The Glasgow-based firm revealed that elevated and a pointy rise within the Nationwide Minimal Wage are the principle drivers of the price surge.
In an announcement signed off by the board, the enterprise stated: “While the Autumn Finances delivered in October 2024 appears a very long time in the past, it contained plenty of proposals which can be prone to have important impacts on the group and the broader automotive market.”
The group highlighted that modifications to employer NIC charges, a decrease NIC threshold, and better minimal wage ranges would collectively add £30m to its wage-related prices yearly.
Whereas 2024 marked a second consecutive yr of progress for Arnold Clark, the corporate famous that UK new automobile registrations stay beneath pre-pandemic ranges.
Battery Electrical Car (BEV) registrations have been up 31% in comparison with 2023, but BEVs nonetheless fell in need of the Authorities’s Zero Emission Car (ZEV) Mandate targets regardless of sturdy backing from producers.
Even so, Arnold Clark delivered a powerful new automobile gross sales efficiency, with 64,215 new models offered – up 22% year-on-year – bolstered by a marked rise in EV gross sales. Nevertheless, the corporate acknowledged this was accompanied by a slight dip in retail margins.
Within the used automobile market, the enterprise benefited from a 5.5% enhance in transactions, with over 7.6 million gross sales throughout 2024.
This mirrored improved availability and selection, notably amongst 3-4-year-old autos, as new automobile provide strengthened.
Whereas used automobile costs stabilised after sharp declines in late 2023, producer reductions on new BEVs negatively impacted used BEV values – a drop that in flip helped stimulate shopper demand.
Arnold Clark reported an total 2% progress in used car gross sales, promoting 191,699 autos over the yr whereas sustaining wholesome used car margins.
Elsewhere within the enterprise, aftersales noticed profitability rise 7%, regardless of persistent challenges in attracting skilled technicians.
The group highlighted its apprentice programme as key to addressing labour shortages, welcoming over 300 new apprentices in 2024 and beginning 2025 with a recent consumption of 127 in March. In whole, the group now employs practically 800 apprentices.
Working bills elevated by £21m within the yr primarily as a consequence of inflationary pressures which is mirrored worker prices growing by £21m to £496m, regardless of worker numbers remaining comparatively constant.
Arnold Clark Finance Restricted, the group’s car leasing and rental arm, posted a 13% income enhance to £607m, regardless of robust market circumstances.
The rental division additionally delivered a powerful yr, with excessive car utilisation and elevated income. Nevertheless, its leasing fleet measurement declined as a result of agency’s choice to scale back publicity in particular market segments.
Revenue earlier than tax fell to £6m right here, down from £40m in 2023, primarily as a consequence of greater borrowing prices, elevated depreciation on pricier alternative autos, along with the autumn in EV residual values inside its contract rent fleet.
In the meantime, Central Automobile Auctions greater than doubled its exercise, holding 471 auctions in 2024 – up from 226 in 2023. The expansion was supported by a rollout of smaller auctions at new satellite tv for pc areas.
This boosted car gross sales by 21% to 53,998, with a return to bodily auctions serving to to enhance conversion charges, driving a 28% enhance in income and a notable rise in pre-tax earnings.
Regardless of these headwinds, Arnold Clark’s outgoing chief govt and group managing director Eddie Hawthorne stated: “I’m happy to report that, regardless of a tough financial surroundings, which continues to influence shopper demand mixed with the disruption within the UK automobile market, the group had a optimistic full yr efficiency.”
He added that the enterprise was centered on rising the enterprise by increasing the geographic footprint of its shops throughout each its multi-franchise dealership and used automobile retail community, together with the supporting infrastructure.
Based by the late Sir Arnold Clark in 1954, the enterprise operates over 200 dealerships throughout the UK.
