Group 1 Automotive is making continued efforts to reduce costs in its UK operations, aiming to save £10 million annually. These measures have resulted in a 10% reduction in headcount through Q1 redundancies, as well as increased efficiency in managing used car stocks and demonstrators. President and Chief Executive Daryl Kenningham acknowledged the company’s previous inefficiency and emphasised the need to “get smarter with back-office functions”.
In the first quarter of this year, Group 1’s UK business achieved record revenues of $824.8 million (£663 million), representing a 4.7% increase compared to the previous year. However, gross profit experienced a decline of -6.2% to $103.5 million during the same period. Globally, Group 1 reported a pre-tax profit decrease of -6.4% to $193.3 million, with turnover increasing by 8.2% to $4.47 billion.
Chief Financial Officer Daniel McHenry highlighted the UK team’s achievements in record quarterly revenues from parts and service, new vehicle sales, and a significant increase in used vehicle sales volumes. He also noted that these achievements were made without adding any new stores during the period.
Daryl Kenningham expressed satisfaction with the first quarter’s results, stating that the company had made meaningful progress in cost containment while continuing to grow the business in key areas. He admitted that there is still work to be done but emphasized the significant strides made in improving executional areas like used cars.
Looking ahead, Group 1 is set to complete the acquisition of Inchcape’s UK retail business for £346 million in Q3 2024. Kenningham expressed confidence in the UK business’s position and looks forward to expanding operations with the pending acquisition of Inchcape’s UK retail automotive business.
In conclusion, Group 1’s focus on optimizing operations and cost-cutting measures have begun to yield positive results, as evidenced by the increase in sales during Q2. The company remains committed to its ongoing improvements and is poised for further growth with the impending acquisition of Inchcape’s UK retail business in the coming months.