Focus at Lindsay Cars on returning company to profit
Lindsay Cars is a main dealer for new Ford cars in a large part of the Northern Ireland vehicle market. Trading in 2011 has proved, as described by the directors, as disappointing.
The annual report says that the total market for new cars in Northern Ireland fell by 11.6% in 2011 and adds that in the total retail market turnover was down by 22%. This sets the background for a drop in turnover in Lindsay Cars of 10%.
In the last five years, turnover in Lindsay Cars has fallen. The best results of recent years were in 2007 when sales reached nearly £124m. After a fall in 2008 and 2009, sales increased fractionally in 2010 before falling again in 2011.
Lindsay Cars estimate that the share of the car market held by Ford improved in 2011 to 10.7%, compared to 10.3% a year earlier, and this meant that Ford retained total retail market leadership.
Operating profit margins were squeezed last year as a consequence of the much tighter market conditions affecting new car sales. For the first time in recent years, the business reported an operating loss of £0.6m following an operating profit of £1.2m in 2010.
Pre-tax profits are, each year, lower than operating profits because of the deduction of net interest payments on the funds borrowed, largely internally, through the financing arrangements of the Ford Group of companies. The pre-tax loss was £1.1m.
The value of vehicles held in stock at the year-end rose slightly to £29.6m from £27.9m at the end of 2010. These figures are lower than the peak year, 2007, when they were valued at £41.2m.
Average employment in the company varied only a little from year to year but has fallen marginally by 2% in 2011 to 405 people.
No dividends to shareholders have been declared in each of the last four years.
Year to year changes in the value of shareholders' funds have reflected the retention of post-tax profits or losses but have also been influenced by changes in the balance sheet valuation of land and property. In 2008, an unrealised gain of £1.6m was added to the figures. In 2010 the position was reversed when an unrealised loss of £2.5m was deducted. No further unrealised gains or losses were noted in 2011.
The directors report that, in 2012, they are focused on returning the company into a profitable position.