Belfast Telegraph

Company Snapshot: Donnelly Brothers Garages

Bumpy road for motor business

By John Simpson

Donnelly Brothers Garages is headquartered in Dungannon although the parent company and seven active trading subsidiaries have different businesses outlets across a number of different locations.

The group is one of the largest Northern Ireland dealerships in business to retail motor vehicles and associated services.

In the year to the end of May 2011 turnover fell from the record higher level of the preceding year. The directors report that the continuing difficult economic climate had an impact on sales which were 10% lower. However, in 2011, turnover remained higher than two years ago.

Operating profits fell sharply in the year to May 2011. At £1.4m operating profits were less than half those of the earlier year.

Pre-tax profits were similarly affected and at £0.6m were less a third of the level in 2009-10. Net interest charges have fallen in the last two years but in 2011 were over £760,000.

As is common in the vehicle trade, the business holds significant levels of vehicles in stock. The valuation of vehicle stock at over £23m was equivalent to turnover in an average seven-week period, slightly higher than a year earlier.

In the last six years the dealer franchises held by the group has increased from 20 to 31. The firm does not usually make large dividend payments to the shareholders. In 2009-10, £25,000 was paid but there were no dividend allocations in 2010-11. Retained post-tax profits contribute to the part-financing capital investment.

Capital expenditure in 2010-11 fell to £1.2m from over £3.3m, a year earlier.

Employment in the group has averaged more than 500 people in each of the last two years, having increased steadily earlier in the decade. In 2011 employment averaged 552 people.