Losses deepen at Vines Group
11 September 2019
US-owned BMW and Mini retailer Vines Group has reported a £1.1 million increase in losses before tax to £1.77m for 2018. This is despite a marginal increase in turnover to £181m (2017: £174m).
The company blamed large numbers of pre-registrations eroding margins on nearly-new cars, something that was highlighted in BMW’s poor showing in the NFDA Dealer Attitude Survey last week. This led to a “significant reduction in gross margins across our business and the wider BMW network”.
The growth of manufacturer service packs was also putting “constant pressure” on the service business. While its returns were above average in 2019, it predicted this area will become increasingly competitive in 2019.
The directors admitted the performance was “below expectations”. Measures have already been taken to address it, including a streamlining of staff in Q4 2018 that will save £335k in payroll costs for 2019. Policies for used cars, finance sales and aftersales have also been revised.