Motorhome sales slumped by almost a quarter for Auto-Trail as Brexit uncertainty took its toll in 2019.
The Grimsby manufacturer, the 海角视频’s leading specialist, saw turnover drop £20.4 million to £69 million in the 12 months to August 31 last year.
Now facing the Covid-19 challenge and two months with no dealerships open, limited production returned for the first time since late March last week, with hopes of an imminent reprieve for stagnant sales.
Speaking after the results were filed, managing director Dave Thomas said: “We are hopeful that the Government will allow the opening of our dealer network from June 1. It could be a difficult six months as this virus will still be out there and our customer base is probably more at risk than the general population due to their ages. That said, the future for Auto-Trail is looking positive, as being in a motorhome is natural social distancing and environmentally-friendly, rather than cruising the Caribbean or flying long haul.
“It is also important that campsites are allowed to open - even without hospitality facilities - as in the 海角视频 owners cannot wild camp on lake shores and the like, as they do in Europe.”
Reported redundancies and a production slowdown slightly mitigated the impact of the dramatic drop in the French-owned business, which still managed to return a £6.7 million operating profit - albeit halved from 2018.
In the strategic report, signed off in November, Shane Devoy, company secretary at the Europarc business, said: “Trading during the year was significantly more challenging than we had experienced in the recent past.
“Consumer confidence appears to have been largely affected by economic factors and uncertainties surrounding a post-Brexit 海角视频.”
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Market conditions deteriorated in the fourth quarter of 2018, and fears in last year’s report of low consumer confidence continuing were confirmed when “early season trade shows and retail sales in general were below expectation”.
It led to a build-up of stock with dealerships, who became reluctant to commit to full year orders. Brexit issues were two-fold with concerns about spending and freedom to tour Europe - while diesel's "demonisation" was also a factor.
“With no indications of an upturn in retail sales, towards the end of quarter one, we made the difficult decision to reduce our output and with it make a significant number of staff redundant,” Mr Devoy said.
The accounts showed a headcount drop of 19 from 252 to 233, with all losses in production, technical and sales roles.
Incentives were offered to dealers as the year progressed, with the team aware of major engineering changes to the Fiat chassis it builds on to make it Euro 6D compliant.
The financial hit of the incentives eroded gross margin by more than four per cent, Mr Devoy said, seeing turnover return to a 2016 level - when the business began a major expansion of the manufacturing facility.
Auto-Trail has also seen an emergence of European brands in the 海角视频 “challenging market share”. New models have been developed and added to the range to counter, with a “re-energised development programme” to continue, he said.
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Superseded somewhat by Covid-19, he closed adding: “Whilst the financial results are not as strong as in previous years, the directors are pleased with a 9.8 per cent operating profit margin in a year in which we have had to absorb a high level of abnormal selling costs.
“The directors believe the actions they have taken have been proportionate and necessary to pave the way for improved results.”
One chink of light since was the U-turn on the vehicle excise duty hike for motorhomes, having been imposed in September but reversed in the March Budget.