Group 1 Automotive UK profit performance up by nearly 37%

Group 1 has posted a 36.6% boost in gross profit performance across its UK business over the last 12 months to £451 million.

UK group revenues also increased, up by 36% to £3.3 billion over the same period.

The business is now nearing the end of a $16.7 million (£13.4m) restructure of its UK business following the £346m acquisition of Inchcape Retail last year.

The US-based business has posted its results for 2024, where it posted an increase for total group revenues by 11.7% to $19.9 billion (£16bn) and an improved gross profit performance up 7.3% to $3.3bn.

Group 1 has 259 dealerships across the US and the UK.

New retail sales increased by 40.5% last year in the UK to 46,015 units, while used car retail sales increased by 35% to 56,717 units.

Used car gross profit per unit saw a slight drop of 0.5% to £1,148, while pressue on new car margins was higher with a drop of 14% down to an average of £2,557 on gross profit per unit sold.

Group 1's aftersales performance in the UK offered the biggest boost to its gross profit performance, up by 47.8% to £200m.

Daryl Kenningham, Group 1 president and chief executive, said: “Our UK team is better positioned today than at any time in our history, with exceptional brand partners and a portfolio of dealerships that provide us geographic diversification across a broader UK market.

“Our ongoing restructuring actions to integrate Inchcape Retail stores which began in the fourth quarter of 2024 will ultimately position us to capture the full value of this acquisition.”

The UK specific part of Group 1’s financial results said the addition of 54 Inchcape Retail locations added scale and geographic diversification for its UK operations, with key hubs now established in the Midlands, the Northwest of England and Wales.

It said integration activities began immediately following the acquisition of the Inchcape sites, including the initiation of a UK wide restructuring plan consisting of “workforce realignment, strategic closing of certain facilities and systems integrations”.

Group 1 said “significant progress” has been made in switching over to Group 1’s preferred dealer management system (DMS) compared to the legacy systems the Inchcape Retail sites were using.

It said switching to a different DMS, which can be a complicated process, “hampered our operations for a period of time as we completed the in-store conversions”.

These restructuring and integration actions led to the £13.4m in restructuring charges in Q4 last year.

Group 1 is expecting a “significant number” of restructuring activities to be completed by the end of Q1 this year.