FAMILY-OWNED car retailer JCT600 has announced record financial results, but its chief executive admitted an Office of Fair Trading (OFT) investigation into its acquisition of the Gilder Group has had a big financial impact on the business.
The Bradford-based group, one of the UK’s largest privately owned companies, said its turnover for 2013 rose by 36 per cent to a record £909m.
The figures showed an operating profit before goodwill and exceptional items of £20.3m, up 30 per cent from £15.6m the previous year.
The figures included a 10-month contribution from the Gilder dealerships acquired by JCT600 in March 2013 comprising two Audi, four Volkswagen and a SEAT dealership as well as two Volkswagen Commercial Vehicle sites, two parts depots and a body shop.
Chief executive John Tordoff said the OFT’s investigation, which delayed the completion of the deal for the Sheffield-based group by about six months, had cost the company about £300,000 in legal fees and other associated costs.
He added: “But the much bigger financial impact was the impact it had on the business overall. We weren’t allowed to do anything to integrate the business into our group over several months.”
Mr Tordoff said he could not put an exact figure on how much the delay had cost the company in total.
“It caused us problems because we had recruited additional people to integrate into the business from day one and they couldn’t do anything until it was over,” he added.
The acquisition took the number of JCT600 branches to 50 and strengthened its position in South Yorkshire, Derbyshire and Nottinghamshire.
Mr Tordoff said the company was “working hard” to consolidate the enlarged group.
As well as restructuring its senior management team to further drive performance, JCT600 is continuing to invest both in additional staff and its online presence.
The group said its results were driven by a 46 per cent increase in new vehicle sales (16 per cent on a like-for-like basis), well ahead of the UK retail market for the brands JCT600 represents which increased by 9.7 per cent.
The firm also out-performed the used car market which, following a decline for the previous six years, saw a rise in sales of 0.94 per cent while JCT600 enjoyed a 32 per cent rise in unit sales (17 per cent like-for-like). The group’s after sales operation also continued the upward trend seen in 2012 with gross profit increasing by over £10m (£1.8m like-for-like).
Increased gross profit margins helped JCT600’s fleet division with sales increasing by 66 per cent (28 per cent like-for-like) compared with an increase in the UK fleet market of 5.7 per cent.
“The group has shown resilience throughout the downturn by focusing on tightly controlling costs while providing outstanding customer care. This, together with the additional dealerships provided by the Gilder acquisition, means we are well-placed to benefit from the upturn in consumer and business confidence which began last year,” said Mr Tordoff.
“2014 has already got off to a good start with new vehicle sales increasing by 18 per cent in the first quarter...and we are optimistic that this momentum will continue.
“The addition of the nine former Gilder dealerships has already made a strong contribution to our continued success, increasing sales as well as extending our geographic reach, and we expect them to have a greater impact now they are fully integrated into the JCT600 family.”
Mr Tordoff added: “We are only too aware of the importance of the internet to our customers and this is another area in which we will continue to focus – we have seen a huge growth in traffic, particularly to our mobile site with visits increasing by 139 per cent last year.”