The owner of Cinch and Webuyanycar slashed its loss almost in half despite suffering a sharp drop in the value of used cars in 2023.
Constellation Automotive, whose brands also include Marshall Motor Group and BCA, has reported a pre-tax loss of £74.4m for the year to 31 March, 2024, down from the loss of £135.3m it fell to in the prior 12 months.
Over the same period, the Hampshire-headquartered group’s revenue fell from £9.68bn to £9.33bn, according to newly-filed accounts with Companies House.
The group said its progress was impacted by the “sharp correction” in the value of used vehicles through its third quarter.
It added that CAP HPI, a data business supplying the automotive industry with used car pricing and technical information, reported a fall of 10.5 per cent – the largest drop since the 2008 financial crisis.
However, Constellation Automotive adde that “recovery momentum returned” in the following quarter as pricing stabilised and the group “traded with improved confidence as market participants returned”.
In October 2023, the group sold its remaining 19.5 per cent stake in Looks for £96.8m following its acquisition by Global Auto Holdings.
Its original 19.9 per cent stake was acquired in January 2022 for £79.6m.
Cinch and Webuyanycar owner Constellation Automotive is backed by TDR Capital which is about to become the majority owner of supermarket giant, Asda.
It has owned Constellation Automotive following a £2bn deal in November 2019.
TDR Capital’s portfolio also incudes the likes of David Lloyd Leisure and Stonegate Pub Group.
Cinch and Webuyanycar owner remains cautious
A statement signed off by the board said: “The group exited FY24 with good momentum for FY25 but has become cautious about the rate of growth in the mid term with uncertain conditions for the new car market.
“Battery electric vehicles (BEV) sales growth has stalled in the UK and consumers delay purchasing new vehicles because of a confusing value proposition, given BEVs have historically had higher purchase prices but recently weak residuals.
“OEMs (original equipment manufacturers) face significant fines for missing zero emissions vehicle sales levels, starting at 22 per cent of total car sales and 10 per cent of val sales in 2024.
“The sales level rises incrementally each year to 80 per cent for cars and 70 per cent for vans by 2030, and 100 per cent for both by 2035.
“For those looking to change vehicle, the residual values of BEVs are uncertain, new internal combustion engine vehicles look expensive as OEMs begin to push discounts on BEVs and the nearly new market misses the volume from reduced supply in the past four years.”