Operating profit with car retail giant JCT600 dipped last year as the family-owned firm refused to preregister new cars in response to mounting manufacturer targets.
The Bradford-based business saw its profit margins fall and operating costs rise during 2016, with overall operating profit before exceptionals at £17.9m compared with 2015’s £20.7m, something it ascribed to over supply of vehicles.
Despite the fall JCT600 achieved record revenues of £1.222 billion, an increase of almost seven per cent since the previous year, after it reported record levels of both new and used vehicle sales, as well as aftersales.
The firm, run by chief executive John Tordoff, continued to invest in its 50-strong network of dealerships with major redevelopments taking place at Lincoln, Leeds, Newcastle, Rotherham, Hull, York and Bradford.
The group also continued to develop its digital platform which saw total visitors increase substantially. CONT Pg 3
Mr Tordoff told the Yorkshire Post: “There is a general feeling that the motor industry is in rude health due to the amount of cars that are getting registered.
“Last year, the UK’s national new car market hit a record of 2.7m registrations which, on the face of it But that doesn’t tell the whole story. A significant number of these are being preregistered by dealers.
“With many of these vehicles subsequently being sold as used cars, this resulted in a significant downward pressure on both new and used vehicle profit margins. Certainly we saw dealers sitting on thousands of cars for months, meaning that they were depreciating all the while.
“This drives all sorts of bad behaviour.
“Our strategy has been to have as few preregisters as possible. We have probably only got about 50. With over 70 years’ experience in the industry, we are well-versed in the vagaries of the market and remain committed to providing great value and outstanding service which we know will keep our customers coming back to us.
“Demand has held up well. We have seen little impact in terms of what has been happening in the world. Ultimately cars are commodities that people see as something they cannot do without.”
The business also made significant progress in its quest to be ‘the best place to work’, rising a massive 27 places to take the 57th position in the Sunday Times ‘Best 100 Companies to Work For’ ranking for 2017. It routinely hires 30-40 new apprenticeships per year.
Nigel Shaw, group finance director at JCT600, said: “Last year, many of our brands put in strong performances and, despite uncertainty in the UK economy in the aftermath of the Brexit vote, so far customer confidence remains strong.”
Founded in 1946 on Sticker Lane, Bradford, by current chairman Jack Tordoff, JCT600 has grown from a single dealership into the largest privately owned business in Yorkshire. Mr Tordoff Snr was given the Lifetime Award at last year’s Yorkshire Post Excellence in Business Awards.