Hedin Automotive reports losses but remains optimistic about future growth
Hedin Automotive, a subsidiary of Sweden-based Hedin Mobility Group, has recorded a loss-making performance in its latest trading statement.
Performance was impacted due to several factors including the general economic slowdown which reduced demand, the introduction of the agency sale model and a two-week closure period for staff training on a new Dealer Management System due to economic challenges, a shift to the agency business model.
In addition, the insolvency of the company’s largest debtor which required a bad debt provision of PS2 million, further hit profitability.
Hedin Automotive, a subsidiary of Sweden-based Hedin Mobility Group, has recorded a loss-making performance in its latest trading statement.
Performance was impacted due to several factors including the general economic slowdown which reduced demand, the introduction of the agency sale model and a two-week closure period for staff training on a new Dealer Management System due to economic challenges, a shift to the agency business model.
In addition, the insolvency of the company’s largest debtor which required a bad debt provision of PS2 million, further hit profitability.
“2023 was a challenging year for us due to the economic climate, our business model transition, and unexpected financial setbacks. We remain confident, however, that our strategic investment will produce positive results over the long term,” said Anders Hedin, chief executive of Hedin Mobility Group. Operating losses were PS4.06m and pretax losses PS7.6m. EBITDA showed losses of PS1.4m. Net assets were valued PS4.76m.
We anticipate greater stability as we enter 2024 despite the current economic uncertainty. Hedin said that despite the significant financial and operational challenges, the company’s outlook for 2024 is optimistic. The company reports stronger sales in all areas. The group has also completed a comprehensive cost review, which is expected to reduce the cost base moving forward.
“Although there will be initial costs tied to realigning our cost base, we expect to return to profitability by the end of 2024,” the chief executive said.
Hedin Automotive said it will continue to invest in upgrading its facilities including its BMW and Mini Ruxley facility, with the project scheduled for completion by September.
“We remain committed to building a strong, customer-centric business that continues to evolve in line with the automotive industry’s needs,” said Hedin. We are confident about the prospects of the coming year, despite the economic turmoil. The group’s 2023 strategy focused on increasing its market share. In April of that year, Hedin Automotive acquired four Mercedes-Benz businesses from Mercedes-Benz Retail Group UK, marking a significant step in Hedin’s expansion into the UK market.
Later that year, Hedin bolstered its presence by acquiring BMW retailer group Stephen James Alliance.
“The acquisition of Stephen James’ operations follows our earlier purchase of Mercedes-Benz Retail Group and further strengthens our foothold in the UK,” said chief executive Anders Hedin. “We see this as a critical move in establishing a premium motor retail business in the UK that is poised for further growth.”
In 2022, the dealership group withdrew a PS411m takeover offer for Pendragon, citing “challenging economic conditions”.
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