PETER Vardy Holdings, the Scottish motor dealer, has reported the best financial performance in its 15-year history as demand for used cars surged to an “all-time high”.
The company, which has 14 dealerships selling prestige, used and heritage cars around Scotland, made a profit before tax of £8.9 million in the year ended December 31, up from £7.2m. That came as group turnover leapt by 27.3 per cent to £560.7m, new accounts show.
Peter Vardy delivered the record results in a year that saw the price of used cars soar in the wake of a global shortage of semiconductors, which affected the supply of new cars to the market. It was also notable for Peter Vardy as it ended the company’s 15-year partnership with Vauxhall, with six former Vauxhall outlets transformed into used car supermarkets. The company also rebranded from Peter Vardy CarStore to Peter Vardy Carz, and signaled in the accounts that it was considering “future expansion plans in Scotland and the north-east of England to accelerate the success of this area of the business.”
Peter Vardy, which employs more than 1,250 people, continues to operate five prestige car dealerships, representing BMW, MINI, Jaguar Land Rover and Porsche throughout Scotland, as well as a heritage car dealership.
New accounts show the group sold 20,352 used cars over the year to December 31, 33 per cent more than in the previous 12 months. This lifted used car sales to £363.1m from £228m, the accounts show, with the strength of the market driving operating margins up by 71.3%, or £502 per unit, to £1,207 per unit.
The company said it capitalized on the high demand for used cars with the launch of its GoodBye Car product, which allows it to purchase vehicles directly from consumers.
Chief executive Peter Vardy writes in the accounts: “2021 was an unprecedented year for used vehicle sales and margin with used cars appreciating in value month-on-month and demand at an all-time high, the first time this has been seen in the 15-year history of the business and largely driven by the lack of new car supply and the semi-conductor issues across the world that continued to prove challenging.”
The limited supply of new cars helped the company achieve record margins and sales from this category of vehicles. Operating profit at the dealer’s new car business climbed to £8.8m from £8.2m, despite lower volumes, in a year that saw it close its Vauxhall franchise in July, and face ongoing “supply issues”. Margin per unit for new cars increased by 79.1% to £3,554.
Mr Vardy added: “As we have outlined, 2021 continued to be a turbulent year for new car supply and delivery, however, it proved to be an extremely successful year for the group, in terms of new car order taking and securing the future profit and success of the business.
“As a group, we finished 2021 with a new car future order take of 1,866 vehicles, which will generate £14.2m of already ‘banked’ gross profit to the business, when these vehicles are delivered to our guests in 2022 and 2023.”
Peter Vardy said his finance brokerage business, CarMoney, had a record year in 2021, delivering £97m of loans to customers throughout the UK. Last year it also launched a new mobility division, including a leasing business under which it aims to lease 15,000 vehicles as part of an initial five-year plan. In November it launched CARZ Direct, a service enabling consumers to buy cars fully online.
Recently published figures from the Society of Motor Manufacturers and Traders signaled a shrinking of used car sales. The SMMT reported in August that the used car market decreased by 18.8% in the second quarter, with 407,820 fewer vehicles changing hands compared to the same period last year. It noted that the scale of the decline was artificially inflated by comparison with 2021, when the easing of Covid restrictions saw the busiest second quarter since records began.
The SMMT noted in August the ongoing shortage of semiconductors was continuing to impact the new car market supply, which was having a knock-on effect on used car sales.