Harwoods Ltd went into the red in the year to December 2023 turning in losses of £12.5m on turnover of £625.7m for the period.
This was in sharp contrast to profits of £7.8m and turnover of £636.3m in the prior year, according to figures filed this month at Companies House.
It said the year had been challenging one for the group and sector with vehicle margins deteriorating due to reduced stock turn, increased costs, and increased stocking charges because of an increase in Banik base rates.
It said pressures on car supply had eased over the year and has outstripped demand, which reduced new car margins.
“Subsequently, this oversupply had a knock-on effect on the used car market, particularly in the premium sector, causing profits to fall sharply in the final quarter of 2024.”
Its gross profit percentage fell by 1.2 percentage points to 11.1%, equating to £7.7m of profit. There were also increased costs of £6.1m compared to the previous year. Increased interest rates saw a doubling of the interest charge to £5.4m for the year.
The group breached some Bank covenants, which have been wived by the banks who continue to support the group.
The group has conducted a “complete review” of the business and no longer represents Land Rover in Croydon, Edenbridge and Pulborough and only represents Jaguar in Brighton.
It has also appointed a new chairman and CEO and taken on the BYG franchise. The group is forecasting a return to profitability in 2025.
Harwoods parent company is WJ Holdings, which includes property interests.
