Cyber attack dents profit at Arnold Clark as sales near £5bn
Sales at car dealership giant Arnold Clark edged closer to the £5bn mark but the aftermath of a cyber attack and rising costs contributing to a significant cut to its profit.
The Glasgow-headquartered group has reported a revenue of £4.96bn for 2023, newly-filed accounts with Companies House have revealed.
The latest total comes after Arnold Clark posted a revenue of £4.92bn in 2022.
The results also show that the firm’s pre-tax profit was cut from £173.5m to £116m.
New vehicle sales fell by five per cent to 55,820 in the year but an average increase in new car prices reduced its negative impact to the group’s revenue.
Used car sales dropped by three per cent to 187,735 which, Arnold Clark said, was “in part due to our slower start to the year as a result of the cyber attack, a lack of availability of vehicles up to three years old and reduced demand towards the end of 2023 as the increased cost of living started to affect our customers”.
Arnold Clark generated a revenue of £3.4bn from the sale of used cars, up from £3.3bn, while its new vehicle sales remained broadly flat at £1bn.
Arnold Clark ‘faced several significant challenges’
The group’s vehicle leasing and rental business posted a revenue of £537m for the year, up 23 per cent.
However, the division’s pre-tax profit decreased by 39 per cent to £40m as a result of “significantly higher borrowing costs” following the increases to the Bank of England base rate and a rise in depreciation to reflect the drop in value of the electric vehicles in its fleet.
Arnold Clark added that its operating expenses grew by £21m, “mainly due to inflationary pressures” and its annual pay review being brought forward by three months.
A statement signed off by the board said: “The year… saw the group face several significant challenges, staring with the impact of a cyber attack, which the group was victim to in late December 2022, combined with ongoing vehicle supply constraints, the impact of inflation on consumer demand and the effect of higher interest rates.”
During the year, the average number of people employed by Arnold Clark rose from 11,400 to 11,694.