John Martin sale boosts profits 12 | 08 | 2011
EDINBURGH-BASED John Martin Group has reported a £2.3 million rise in profits. The latest figures posted at Companies House highlights the multi-franchise group saw pre-tax profits soar from £303,000 in the previous 12 months, to £2.6m in 2010.
The sale of three of its showrooms — which raised £1.3m — allied to a series of repair contracts with big motor insurers were mainly responsible for the dramatic improvement.
It's worth noting the group's turnover reversed to £129.9m from £146.9m following the disposal of its showroom in Stirling and the sale of its Vauxhall dealerships in Edinburgh and Aberdeen to rival Peter Vardy.
It's not the first time Vardy — grandson of legendary car salesman Reg Vardy, and son of Sir Peter Vardy — has purchased from JMG. In 2006 he bought Martin's BMW and Mini franchises when setting up his own firm in 2006.
The most recent sale reduced John Martin's headcount from 614 to 480 and as a result cut its staffing bill to £14.1m from £16.7m. Having made a profit of £1.3m from the sale of the showrooms, the group booked a one-off restructuring cost of £202,000.
Read our road test of the electric Rolls Royce at John Martin Group
The family-owned firm — which sells a range of marques from up-market models such as Aston Martin, Lotus and Rolls-Royce through to mass-market brands like Kia, Peugeot and Vauxhall — decided not to pay a dividend for a second year running, instead transferring profits to reserves.
"2010 was a challenging year for the group and the motor trade generally as the motoring public adjusted to the consequences of the financial crisis and recession in 2008-9," company secretary, Patrick Sweeney, said.
"It is expected the next few months will be challenging, but the steady recovery in economic growth will feed through to slightly-improved confidence and demand in the second half of 2011.
"In the early part of the year, the group has added new franchises at our Aberdeen, Edinburgh and Glasgow sites, which the directors believe will drive improved profitability.
"The group continues its significant long-term contracts with major insurance providers to carry out accident repair work in a number of locations. These contracts have had a beneficial effect on the profitability of our accident repair company."
Last week, Grangemouth-based John R. Weir — which specialises in Mercedes-Benz — reported profits had accelerated to £424,000 from £134,000 in the year to October 31 on the back of a 9.8% rise in sales to £91.5m.
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Jim McGill