Harwoods, a luxury car dealer group representing brands like Audi, Aston Martin, and Bentley, experienced a challenging 2023, reporting a pre-tax loss of £11.8 million. This represents a significant downturn from the £5.6 million profit recorded in 2022, reflecting a 311% shift in financial performance. The after-tax loss for 2023 reached £10.6 million, as revealed in recently filed accounts at Companies House. The group’s turnover for 2023 totaled £627 million.
Several factors contributed to the downturn. The dramatic decrease in used car prices in the final quarter of 2023 significantly impacted the company, leaving it with elevated stock levels of demonstrators and courtesy vehicles. Increased interest charges also played a role in the financial shift. As a result of the trading performance, Harwoods admitted that ‘some of the group’s banking covenants had not been achieved’. This led to the long-term loan becoming due within a year. The company stated that its bankers are still supporting the business, having ‘waived these covenant breaches’ and established new covenants for 2025, which the dealer anticipates meeting. The group forecasts another loss for 2024, though at a reduced level, and anticipates a return to profitability the following year.
A review of the business led to the discontinuation of Land Rover dealerships in Croydon, Edenbridge, and Pulborough. The group now only represents Jaguar in Brighton. Furthermore, Harwoods has diversified its portfolio by including Chinese car manufacturer BYD, moving beyond its traditional premium brand focus.
CEO Archie Harwood commented on the difficult year, stating, ‘2023 was a challenging year for the industry and group, where vehicle margins deteriorated throughout the year.’ He noted the combined impact of increased interest and stocking costs. Harwood also highlighted that the post-COVID period of limited supply resulted in relaxed stocking policies, unusual specifications, as well as inflated prices. ‘New car supply improved over the year, which in turn affected the used car market with prices beginning to realign themselves to previous levels. ‘This impacted the group’s profitability, as prices fell sharply, and large provisions were taken against stock at the year end.’ Harwood also pointed out that the group saw aftersales growth and continued to invest in the business.
In September, Jon Wakefield stepped down as CEO, and Archie Harwood assumed the role. In 2023, the company’s highest-paid director received emoluments of £750,729, including pension contributions.
In a statement, Harwoods added that a number of manufacturers in the Harwoods Group portfolio faced product challenges in 2023. Bentley Motors, for example, reported an 11% decline in vehicle sales for 2023, due to rising costs and slower economies. Additionally, McLaren experienced problems completing its product line development, and INEOS Grenadier also faced supply chain issues. The firm is prioritizing its used car business and has launched Harwoods Assured, a new used car platform. The statement added: ‘Harwoods will focus on improving this offering in 2025 where it will offer Harwoods Assured used cars with a much greater variety of premium used cars brands on offer.’
