Citygate Automotive profit decline 2022

author: FutureCar Staff    

Car dealer group Citygate Automotive experienced a £2m drop in profits in 2022, according to its annual results for the 12 months ending December 31. The company reported a profit before tax of £7.4m in 2022, compared to £9.4m in the previous year. Turnover increased from £336.3m to £362.4m, and gross profit also rose by £2m, from £51.2m to £53.2m.

In its annual results submitted to Companies House, Citygate Automotive mentioned that many of its brands had lost market share in the new car market. While profit on new vehicles had improved, this was offset by a decline in profit from used cars. The company sold 6,243 new cars, down 541 from the previous year, and 6,506 used cars, down 382.

The board of Citygate Automotive stated that the Volkswagen, Seat, and Skoda brands had lost market share due to the semiconductor crisis, which disrupted the supply of new vehicles. However, the Kia brand gained market share and grew registrations to a record 100,200 vehicles, increasing market share to 6.2%. The light commercial vehicle segment declined by 20.6% to 282,000 units, with VW Commercial Vehicles outperforming the market and becoming the second-largest brand.

Despite the challenges, service hours and bodyshop hours both increased, and parts turnover rose by £1.9m. The company's turnover grew by £26.1m (7.7%) to £362.4m in 2022. In the vehicle sales department, a favorable mix with higher average prices offset the decline in new and used car volumes. Aftersales also performed well, with service hours up 2.1%, bodyshop hours up 21.7%, and parts revenue up 15.5%.

However, the decline in used car profitability and increased distribution and administration costs impacted the company's overall performance. Distribution expenses increased by £1.8m to £26.9m, mainly due to increased staff and vehicle costs. Administration costs rose by £2.6m to £20.5m, driven by ongoing investments in IT projects for digitizing processes and improving operational efficiency.

Citygate Automotive's annual results reflect a challenging year for the company, with a decline in profits and market share for some of its brands. However, there were positive developments in service hours, bodyshop hours, and parts turnover. The company will continue to focus on improving profitability and operational efficiency through investments in IT projects.

Image: Citygate Volkswagen West London

FutureCar Staff