Perrys reports strong financial results for 2023 despite market challenges

AM100 dealership group Perrys managed to finish the year on a high note, demonstrating resilience amid a fluctuating market and

Perrys managed to finish the year on a high note, demonstrating resilience amid a fluctuating market and rising financing costs.

In financial results for the year ending 31 December 2023, Perrys reported a solid performance despite facing market challenges, particularly in the third quarter when retail demand for both new and used cars waned, and used car values fell under pressure.

Additionally, the commercial vehicle market faced challenges in both volume and margins.

The financial report highlights a significant increase in revenue, which rose by 23.5% to £794 million. Gross profit also saw an increase of 7.0%, reaching £89.9 million, up from £84.1 million in 2022.

Despite this, the gross margin decreased from 13.1% in 2022 to 11.3% in 2023. Operating profit, before exceptional items, stood at £5.2 million, a slight increase from £5.1 million the previous year.

The group experienced a sharp rise in finance costs, which increased by 96.2% to £3.1 million due to higher interest rates, which had a particularly severe impact on vehicle funding costs, rising by 185.0% compared to 2022.

The group maintained a positive operating cash flow throughout the year and ended with a net cash position of £6.6 million as of 31 December 2023. Perrys also reported net assets of £77.4 million and met all its covenant tests for the year.

In response to the changing market environment, Perrys said it has focused on cost control and strategic initiatives and remains committed to its regional focus.

Going forward, the group said it aims to capitalise on multi-franchising opportunities to achieve economies of scale while preserving high service quality.

Cost control will remain a critical focus, particularly in managing working capital due to high interest rates and increased new vehicle volumes leading to high stocking charges.

Darren Ardon, managing director of Perrys, commenting on the results, said: "Overall, we were pleased with the results. The first half was good, with volumes and margins holding, and a very strong aftersales result. Quarter three saw more pressure on new retail and the used car values fall, adding further pressure to margins.”

Ardon noted the company's efforts to enhance staff retention and work-life balance, with several new initiatives aimed at making Perrys an employer of choice.