Turning challenges into opportunities is paying off
Vehicle sales in Ireland have plummeted in recent years but Ireland's largest motor retailer, the Joe Duffy Motor Group, has continued to expand both in terms of financial performance and physical presence throughout this turbulent period.
In 2012, the group reported a 7 per cent increase in turnover to €84.5m, despite a 12 per cent fall in the Irish new car market that year. 2012 also saw the group awarded the prestigious Deloitte Best Managed Company status and a European Business Award. In 2013 turnover increased 37 per cent to €116m – the first time the company's turnover exceeded €100m.
In the last 15 months, the group purchased McAlister's VW dealership, the HB Dennis (Volvo and Land Rover) dealership, Finglas Ford, the former Terry Lilly Commercial Vehicles premises and the former Renault dealership of Bill Cullen.
"We've been able to turn the challenges of the downturn into opportunities and are very well positioned for growth and further expansion," says CEO Gavin Hydes.
Currently, the group has a sales franchise for Audi, BMW, MINI, BMW Motorcycles, Ford, Land Rover, Mazda, Volvo, Porsche, SEAT and Volkswagen. Joe Duffy Motor Group currently trades from seven locations in Dublin and employs 230 staff. Hydes expects further sales growth in 2014 despite the fact that new car sales are forecast for only a marginal increase for the year.
Director Financial Advisory, Grant Thornton
The retention of key management and staff is of primary importance to the company and through a very challenging business environment the Joe Duffy Motor Group has continued to implement generous reward structures for their employees in order to maintain and grow their businesses.
Employee retention and incentivisation are key in a sales-driven business like the motor trade, and the approach the group has taken has helped it outperform the competition.
Partner, Corporate Finance, Grant Thornton
The firm has bucked the trend and grown for two main reasons:
First, it implemented a range of cost-saving measures, particularly reducing their fixed overheads. Secondly, it undertook a targeted expansion programme which ensured that the business continued to grow without taking on unsustainable debt.
We believe that increased consumer sentiment combined with the group's ability will ensure the group sustains its impressive growth in 2014.
Partner, Tax, Grant Thornton
When certain conditions are satisfied, capital allowances are available on plant and machinery at 12.5 per cent of the capital expenditure incurred. Joe Duffy MG knows that their state of the art facilities will attract more consumers and lead to increased sales.
Another incentive SMEs should be aware of is the Accelerated Capital Allowance (ACA) which lets firms write off 100 per cent of cost of qualifying energy efficient equipment against profit in the year of purchase.
Partner, Audit, Grant Thornton
Expanding too quick can lead to negative cash flow and financial haemorrhaging, which can really hurt.
This was not the case at Joe Duffy Motor Group where CEO Gavin Hydes and financial director James O'Neill lead a very progressive management team with a solid strategic focus. They had not borrowed too much and had cash in the bank when recession hit.
They were selective in their targets and only bought at the right time and the right price.