UK REPORT: ARE DEALERS ‘ATTRACTIVE’ AGAIN?

As in Australia, Dealership sales are strong in the UK, prompting accounting group, BDO International, to state that Dealers are back in favour with the car-buying public and investors.

The Motor 150 Report aggregates the financial results for the top 150 companies operating in the UK retail motor industry. According to BDO Australia partner, Mark Ward, the challenges and trends encountered by UK Dealers are very similar to those faced in Australia.

Are Dealers ‘attractive ’ again?

“Interesting are the observations regarding merger and acquisition activity in the UK,” Mr Ward said.

He said the British report made observations similar to those noted by BDO in Australia. These included:

  • Large UK groups consolidating overseas buyer interest.
  • Bank and stock market support for the sector.
  • Good valuations based on the traditional net assets plus goodwill premium.
  • Willing buyers for high and low performing dealers.

In summary

The BDO Motor 150 report reveals:

  • turnover of £55.2bn, which represents a 15.7% increase on the prior year
  • gross margin of 11.17%, which has decreased steadily over recent years
  • net profit before tax of £825m, which represents a 27% increase on the prior year
  • return on equity of 17.61% compared to the previous year of 15.45%, and
  • net profit before tax as a percentage of sales of 1.49%, which has increased steadily over the last few years.

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