UK Dealerships: Financial Key Ratios
Motortrader.com reports the average UK motor retailer produced a profit of just over £42,000 in June, the same as last year on increased turnover.
Dealers generated a return on sales of 1.21% compared to 1.33% in June last year, according to figures from dealer profitability specialist ASE.
“With profit on a par and turnover up, as a result of increased registrations, we therefore see a significant drop in the return on sales percentage compared to the prior year.
“This reflects the fact that dealers are having to work harder to generate the same return with a larger volume of transactions and this is expected to continue,” said ASE chairman Mike Jones.
Jones said profitability for the first half of the year was on a par with the prior year, albeit with a slight fallback in the second quarter. It is far too early to blame this on the impact of Brexit as the results contained one week of post-vote trading.
Jones said that used car return on investment fell in June as a result of increased stock holding reflecting the impact of unsold self-registered vehicles arriving into stock.