Auto Retail Agenda: 6 November 2023
04 November 2023
- GARY SAVAGE HITS BACK AT NFDA SURVEY RESULTS
- MARSHALL POSTS £43m PROFIT FOR 2023
- CAZOO LAUNCHES CONVERTIBLE NOTES EXCHANGE OFFER
- AUTO TRADER SAYS ‘CONTEXT IS CRITICAL’ AS USED PRICES FALL
- COX AUTOMOTIVE TO STREAMLINE BRANDS
- VAN MOSSEL’S AUTOPOLIS ACQUIRES FORD RETAILER
- STOCKWATCH: Halfords sells 5% stake in software-as-a-service business Avayler to Bridgestone tyre’s US subsidiary
- COMING UP: UK GDP
- SHARE BUYBACKS SET FOR ANOTHER RECORD
- CHANCELLOR MULLS £10bn INVESTMENT TAX BREAK
Gary Savage hits back at NFDA survey results
Mercedes-Benz UK CEO Gary Savage has questioned the latest NFDA Dealer Attitude Survey for its relevancy to the agency model.
As highlighted in the October issue of Auto Retail Bulletin, under true agency agreements, all stock is held by the national sales company, which means there is zero pre-registration by retailers. However, Mercedes retailers scored the brand down for pressure to pre-register.
The introduction of agency agreements has significantly impacted retailers’ profitability and relationship with the brand. Under the question covering current profitability, Mercedes dropped 2.2 points. A year ago, Mercedes was the second highest scoring brand in the NFDA survey, in the current Dealer Attitude Survey it is 13th.
In a letter to Auto Retail Bulletin, Savage said: “I have in the past valued this survey as a barometer of the health of our relationship with our retail network. However, this year it became clear that many of the new car sales related questions are no longer relevant to an agent network.
“Bearing the above in mind we now consider the NFDA survey to be less valuable as a compass in terms of the attitudes of our agents. However, as always, we will continue to collaborate with our network to innovate, as we have done with the launch of agency, to drive forward our mutual success.”
A spokesman for the NFDA responded saying it was planning to work on this area for the next survey.
* Read the full article in the November issue of Auto Retail Bulletin out this week.
Marshall posts £43m profit for 2023
Marshall Motor Holdings has reported a £42.9m profit before tax for the year ending 31 March 2023, on broadly stable revenue of £3.7bn. This compares to profit for the 15 months ended March 2022 of £84.9m (the group changed its accounting reference date to 31 March in December 2021).
The latest figures include a full year’s contribution from the Motorline business.
The directors say a decline in gross margins, from 12.2% to 11.8%, reflect the “unwind of significant market tailwinds”. Market conditions began to normalise in the comparative period from November 2021.
New vehicle sales accounted for 37.3% of revenue and 34.7% of gross profit; used vehicles comprised 52.6% of revenue and 29% gross profit; aftersales accounted for 10.1% of revenue and 36.3% of profit.
During the year, the business acquired one business, Leicester JLR, and disposed of or closed six.
Trading of the group’s shares on the AIM also ceased in June 2022, following Marshall Motor Holding Ltd’s acquisition by CAG Vega 2 Ltd, a subsidiary of Constellation Automotive Holdings.
Cazoo launches convertible notes exchange offer
Cazoo is offering holders of its existing convertible notes the opportunity to exchange them for new secured notes and Class A ordinary shares. Holders of 85% of its $630m of convertible notes have committed to participate in the transaction.
The exchange offer is part of a series of restructuring transactions, which includes the replacement of the existing board of directors with a new seven-person board, six of whom will be chosen by holders of convertible notes.
Cazoo is also planning another reverse stock split. Its shares are currently trading at $0.41.
Auto Trader says ‘context is critical’ as used prices fall
Used car prices contracted for the second consecutive month in October, dropping 1.7% year-on-year and 0.2% month-on-month. It is the largest year-on-year drop in 43 months “but context is critical” says the marketplace.
The market remains resilient, speed of sale is robust, used car supply remains below the level of demand growth – yet 14% of used cars advertised on Auto Trader were priced below their market average in October, revealed data and insights director Richard Walker, so “potential profit is still being left on the table.
“In such a nuanced market, it’s essential to be guided by a vehicle view, not a forecourt view”.
WORLD NEWS
Cox Automotive to streamline brands
Cox Automotive is to streamline its 60 brands down to 13 as part of an effort to simplify its offer to customers. Autotrader and Kelley Blue Book will retain an independent identity, while the other 11 brands, including dealer.com, Dealertrack, Manheim and NextGear Capital will have a ‘by Cox Automotive’ endorsement on their logos.
The remaining 47 brands will be presented as products or capabilities offered by the 13 core units.
Van Mossel’s Autopolis acquires Ford retailer
Luxembourg’s Autopolis, a subsidiary of Van Mossel Automotive Group, has acquired another Ford retailer as part of its aim to consolidate its position as a major Ford distributor in the country. “As part of our growth strategy, it is essential to expand our brand and services,” said Autopolis CEO Marc Devillet.
The retailer sells 10k new and used vehicles a year and has a 15% share of the Luxembourg new car market.
STOCKWATCH
Closing prices on 3 November 2023 and weekly change
Halfords sells 5% stake in software-as-a-service business Avayler to Bridgestone tyre’s US subsidiary
Auto Trader Group 625.2p (+23.6p / +3.8%)
Caffyns 550.0p (+25.0p / +4.6%)
Halfords 220.2p (+22.6p / +10.8%)
Inchcape 692.0p (+26.0p / +3.8%)
Motorpoint 79.0p (+1.4p / +1.7%)
Pendragon 31.9p (-0.35p / -1.0%)
Vertu 76.2p (+1.2p / +1.5%)
COMING UP
Tuesday, UK retail sales
Tuesday, Halifax house price index
Thursday, Auto Trader interims
Friday, UK GDP
MONEY MATTERS
Share buybacks set for another record
UK companies are likely to set a record for share buybacks for the second year in a row. FTSE 100 companies have already spent £55bn on share buybacks this year, and a third are yet to report their financial results.
Chancellor mulls £10bn investment tax break
The ‘full expensing’ tax break, which replaced the ‘super deduction’ scheme in April this year, could be made permanent by chancellor Jeremy Hunt. It allows companies to claim back the cost of investments in IT and machinery in the year they were purchased, rather than spread across multiple tax years.
Worth £10bn a year, it equates to a saving of 25p for every £1 spent, but is currently due to expire in 2026.
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