North-west Clare James Automotive has exceeded budgets for turnover and profits in the year to June 30, 2007.

Return on sales has risen year-on-year from 1.77% to 2.05%.

The company puts its success down to a combination of growing its existing businesses – Volkswagen outlets in Warrington and Liverpool – and the acquisition of Lightcliffe Motors in March.

Lightcliffe added a third VW showroom to the group and a Skoda authorised repair business in Halifax.

Turnover for continuing operations rose from £56.746m to £74.293m, while the Lightcliffe business added just over £5m, taking overall turnover to £79.46m.

Operating profits rose from £1.256m to £1.939, all but £118,196 coming from existing operations.

Clare James managing director Ian Rutter said in his statement that all the group’s sites were in profit.

“In the short to medium term, we believe that our Warrington Volkswagen, Liverpool Volkswagen and Halifax Volkswagen retail outlets have scope for further growth and profitability,” he said.

“Despite a difficult market and continued pressure on margins, the first four months of the new financial year have been encouraging and the directors continue to examine opportunities for profitable growth of the business both organically and by acquisition.”

Clare James was formed in March 2004 to acquire the VW franchises in Warrington and Liverpool under the Volkswagen sponsored retailer programme.

Following the purchase of Lightcliffe in March 2007, financed by interest-bearing loans, the group tendered to become a VW Trade Parts Specialist (TPS) for the Merseyside and Bradford areas.

It won both and started trading as TPS agents during the summer.

Rigorous controls over working capital have generated a net cash inflow from operating activities of £7.7m. The group closed the year with £2.8m in the bank.

The cash reserves will enable Clare James to take advantage of short-term vehicle purchasing opportunities, provide revenues for future acquisitions and help it to pay back the loan to Volkswagen, said Rutter.

“We believe that our business model is one that is sustainable in the existing sites and can be successfully applied to other territories and, indeed, other franchises,” he said.

“Cashflow and profit are the key criteria by which we evaluate all growth opportunities.”