Costs hike sees Arnold Clark profits fall
23 September 2018
Increased apprenticeship levy costs, removal of the cap on debit card fees and higher property rates have left Arnold Clark, the UK’s largest franchised retail group, tackling a higher cost base which eroded profits in 2017, according to the firm’s annual accounts.
The three areas highlighted amounted to a hike in costs of £5.56 million in 2017 compared to 2016. In its 2017 accounts, group turnover increased by 7.3% to £3.93 billion. However, it noted that “a combination of decreased new car profitability and an increased cost base led to a 13.2% reduction in group operating profit to £117.9 million.”
Chief executive Eddie Hawthorne’s report added: “Given the magnitude of these additional expenses in the period, a profit-before-tax of £106.6 million is a significant achievement for the Group.”
On top of that the fall in Sterling following the Brexit vote pushed up the price of imported cars just as the new car sector was slowing but the company’s proficiency in used car retailing helped limit the financial damage.
New car sales were down to 70,167 amid `a significant decline in new car profitability’ but used cars retailed rose to 218,188 from 197,842 in 2016.