Profits rise at Arnold Clark despite hit to turnover
Eddie Hawthorne: 90s recession pales by comparison
Car dealer Arnold Clark saw profits improve significantly last year to £156.6m – up a third from 2019 – helped by online sales and service departments remaining open during the pandemic.
The improvement in profit came despite turnover falling by 14.9% to £3.8 billion.
The company said it had seen a positive start to the financial year, but when showrooms closed it lost more than £800m of revenues in just four months as 65,000 fewer vehicles were sold.
New car sales plunged by 26.5% to 46,509 cars and used car sales were down by 20.2% to 204,627.
At peak, the Glasgow-headquartered group had more than 12,000 staff on furlough and it received over £64 million in payments from the UK government.
The firm said it decided not to furlough any staff in the second lockdown as it felt it was capable of continuing without additional support from the UK government.
Chief executive Eddie Hawthorne said the early 1990s recession and the financial crash “paled into insignificance” in comparison with the impact of the pandemic.
He said the group had benefited from its investment in digital services and platforms in recent years and believed the business would perform strongly in the current financial year.
Total employee numbers fell by around 350 during the year to 12,516. The highest paid director – presumed to be Hawthorne, received a £3m package, down from £5.4m.
The Clark family shareholders agreed that no dividends would be paid during the year.