Cost-cutting aimed toward saving £10 million annually from Group 1 Automotive’s UK operation are continuing to play out through the second quarter of this 12 months to deliver advantages to the underside line.
Group 1 Auto UK has reduced headcount by around 10% through Q1 redundancies, and is making reductions through demonstrators, managing used automotive stocks and other efficiencies after it was slow to react to trading conditions in late 2023 and it had turn out to be inefficient in recent times.
Daryl Kenningham, president and chief executive of USA-based Group 1, told AM the corporate “took a tough take a look at where we were”, and has identified features for improvement, including the necessity to “get smarter with back office functions”.
Its Q1 report shows its UK business achieved record revenues of $824.8 million (£663 million), marking a 4.7% increase in comparison with the previous 12 months. Nevertheless, gross profit declined by -6.2% to $103.5 million.
Globally, Group 1 reported a pre-tax profit decrease of -6.4% to $193.3 million, with turnover increasing by 8.2% to $4.47 billion.
Kenningham said that the UK business had recovered well from a difficult Q4 within the previous 12 months.
Chief financial officer Daniel McHenry added: “Our quarter one revenues were record revenues that the corporate has ever achieved in the UK.”
He highlighted that the UK team achieved record quarterly revenues from parts and repair up 9%, recent vehicle sales up 10%, and a big increase in used vehicle sales volumes, by over 19%.
“So some significant strides in growing our business, and we didn’t add any recent stores in that period,” McHenry added.
Kenningham (pictured) told AM: “We’re happier with the primary quarter than we were with the fourth quarter.
“The work isn’t done, but we felt like we made meaningful progress in cost containment while still growing our business in meaningful areas and showing some discipline around some specific executional areas like used cars.
“It’s a really dynamic used automotive environment but we didn’t execute in addition to we should always have within the fourth quarter. Joyful to see we did a greater job in the primary quarter.”
Group 1 is on target to finish the acquisition of Inchcape’s UK retail business for £346 million during Q3 2024.
“We consider the UK business is well positioned and stay up for the expansion of our UK operations with the pending acquisition of Inchcape’s UK retail automotive business planned for Q3 2024,” he said.
This Article First Appeared At www.am-online.com
