Profit sensitivity is highlighted in the new performance figures released today by ASE.

They show that money is only being made during 'fast-start' or quarter end months.

Reporting on August figures, ASE reports the average dealer lost just over £15,000 in the month.

"This marks a £4,000 deterioration compared to August 2013 and shows that whilst plenty of metal is being shifted, profits are only being earned during fast-start or quarter-end months," said Mike Jones, ASE chairman.

This loss has pulled the rolling 12 month return on sales below 1.5% for the first time since March, however it is confident that this trend will be reversed in September.

"Turnover for July and August is 10% up on the 2013 comparative and the registration statistics for September were strong so we should see profitability rise above 1.5% once more.

"This does, however, represent the second consecutive month where we have failed to reproduce the profits earned during the prior year."

Used car performance improved slightly during the month with a fall in stock days and an improvement in return on investment.

"There is significant scope for both to improve further. However, we will be monitoring for the effect of self registered vehicles during September on results and stock mix over the coming months.

Aftersales performance remains largely static, with marginal gains in overall efficiency being balanced by increases in overheads to produce a slight fall in overhead absorption.

"With a raft of new CI programmes being implemented aftersales revenues will have to grow quickly to stop absorption falling back towards 50%," said Jones.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months performance stats

 

 

Key ratio Benchmark Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14
               
Average dealership profit   £96,000 £9,000 £5,000 £31,000 £3,800 -£15,000
Net profit as % of sales 3.00% 1.55% 1.55% 1.52% 1.54% 1.51% 1.48%
Overhead absorption % 80% 57% 57.90% 56.10% 56.50% 56.40% 56%
Used: new sales 1.5:1 0.88:1 0.88:1 0.87:1 0.87:1 0.87:1 0.87:1
Vehicle sales expenses as % gross 50 61.7 61.6 61.7 61.6 61.68 61.9
Sales per salesman 150 202 200 201 199 198 198
Used vehicle stockturn (days) 45 56 55 55 54.7 54.73 53.7
Return on used car investment % 100 81.2 82 82 81.7 82 82.6
Overall labour efficiency % 100 81.4 81.5 81.7 81.8 82 82
Service gross profit % on labour 75 75.9 75.8 75.8 75.8 75.8 75.8
Service expenses as % gross 40 56.7 56.9 57.2 57.2 57.3 57.6
Hours per retail job card 2.5 1.65 1.65 1.65 1.65 1.65 1.65
Parts gross profit % 22 22.4 22.3 22.3 22.3 22.2 22.2
Parts expenses as % gross 40 44.4 44.6 44.8 44.7 44.7 44.7
Parts stockturn 8 7.7 7.7 7.75 7.79 7.84 7.85