New car margins and currency movements hit Sturgess profits

Chris Sturgess

The Sturgess Motor Group, which recently celebrated its 120th anniversary, and has a royal warrant which it has held since 1971 has seen profits plummet, despite a rise in turnover

Founded in 1897 by Walter E. Sturgess when he set up a small shop in the West End of Leicester manufacturing, selling and servicing bicycles known as W.E. Sturgess & Sons, Sturgess Motor Group has grown to become one of the oldest family-operated motor dealers in the UK and also one of the most respected names in UK motor retailing.

The business saw turnover rise from £142,6m to £146.1m for the year to 31 December 2017, translating into pre-tax profits of £427,000 (down from £1.95m).

A statement signed off by the board says: “2017 presented challenges to the company. It had widely been anticipated that the new car market would contract, however despite this our manufacturer partners continue to plan for, and target, their dealer partners on growth.

“The consequence of this has been pressure on new car margins due to increased competition for new car registrations and (generally) less available margin through the impact of currency movements.

“This had a detrimental impact on the group’s performance during the year.

“The used car performance for our business improved year on year as a result of tighter stock control, however, this was not sufficient to ameliorate the impact of the new car performance.

“While service departmental turnover increased in the year, the mix of work and operational issues within some of our service departments led to a small decrease in year on year contribution. Parts performed well in the year with increases in turnover and profit.

“We view the market as likely to remain unchanged in 2018, however through ongoing structural change and close cost and operational control undertaken during last year, we anticipate an improved performance for business during the year ahead.”

During the year, the company completed the development of its new car preparation centre and bodyshop at Broughton Astley.

The development was hit by delays that the business said led to non-repeating exceptional costs in logistics and security and impacted on trading during the relocation period.