Motor dealers Springfield Cars are taking advantage of increased economic optimism in the firm's first full year since selling off a sizeable chunk of its portfolio to a rival firm.
The Washington-based business, which sells new and used cars as well as offer repairs and servicing and the sale of parts and accessories, sold its Honda dealerships to Vertu Motors in 2012 – a deal which saw it reduce its operations.
The business now runs three Gateshead franchises for Fiat, Citroen and Suzuki, an accident and repair centre in Washington, a Citroen and Fiat authorised repairer also based in Washington and a National Fleet operation in Gateshead.
Since the sale to Vertu, turnover has dropped significantly from £74.03m in 2012 to £43.2m in 2013, latest accounts show, and pre-tax profits also dropped, from £1.09m to £463,460. However, the firm has compared profits and revenues from 2012 with the continuing operations over the course of 2013, which show considerable increases in each case, due in part to increased volumes in both new and used car sales.
A comparison between the continuing operations’ sales over the two financial years show a 20% lift in sales, from the £35.99m those operations generated in 2012.
Overall operating profit in 2012, including the Honda franchises, was £587,844, while last year the firm posted £523,430 – a drop of 10.9%. But comparing operating profit from those parts of the business still in operation, the firm said it also saw a considerable lift.
The director’s report accompanying the accounts said: “Excluding discontinued operations and exceptional profits in 2012 from the sale of the four Honda franchises and in 2013 on the disposal of a freehold property, operating profit percentage has increased by 265%.”
The group said the new car market overall grew by 10.77% in volume terms in 2013, and that was reflected at its own franchises, where a recovering economy combined with low interest rates led to bouyant sales. The franchises Springfield represent saw Citroen increase volumes by 6.3%, Fiat by 20.6% and Suzuki by 32.9%. Overall the group’s new retail sales were 8% up on the prior year and the used vehicle volume increased by 2% against 2012.
The firm said businesses also became more confident about investing in new cars and replenished their fleets. At a local level, the corporate division supplying to local businesses increased volumes by 35%.
The firm said it is highly cash generative as a result of profitability and that income from the £3.7m Honda deal and the sales of a freehold property last December and its fixed assets investment in February had allowed it to repay significant debt.
The directors’ report added: “The company strategy is to continue to focus with our current manufacturer partners in our current market, while identifying franchise opportunities within the North East.”