AM100 Group Endeavour Automotive lifted operating profit by 27% in 2025, but higher costs and Lotus’s move away from agency squeezed its pre-tax result.
In the dealer group’s latest set of accounts, operating profit increased from £3.06m to £3.87m, while pre-tax profit remained positive but fell by 13.2% from £255,816 to £222,026.
The difference was driven by a 30.1% increase in interest and other finance costs to £3.65m.
Endeavour linked the rise partly to funding more wholesale stock at its Lotus dealerships after the manufacturer moved away from the agency model and back to a more traditional franchised dealer model in June 2024.
During 2024, Lotus switched from a Direct to Consumer (DTC) back to a wholesale model.
While the stocking costs had a knock-on effect to pre-tax profit performance, Endeavour also said it has also led to an increase in revenue for new Lotus vehicles sales.
The dealer group delivered the improved operating performance as turnover rose by 16.4% to £277.2m and gross profit increased by 16.1% to £39m.
Vehicle revenue rose by 17.1% to £252.7m, while aftersales turnover increased by 9.8% to £24.5m.
Endeavour said its new car sales volume grew by 17% during 2025, while used vehicle volumes increased by 26%.
The group represents Volvo, Hyundai, Polestar, Lotus, Omoda and Jaecoo.
The directors described the first half of 2025 as a period of strong profitability and year-on-year growth, but said trading became significantly more difficult during the second half.
UK GDP growth of 1.3% was also weighted towards the beginning of the year, with economic growth slowing during the second half.
Endeavour said it had navigated significant increases in employment costs, including higher employer National Insurance contributions and the National Living Wage.
Administrative expenses increased by 14.3% to £37.6m. The average number of employees rose from 412 to 436, while aggregate staff costs increased by 11.1% to £19.2m.
Endeavour has had a busy 2026 after relocating its Letchworth Volvo showroom following a multi-million pound investment, as well as expanding with a new franchise partner with Geely.
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Trading pressures continue into 2026
Endeavour said the more difficult conditions experienced during the second half of 2025 had continued into 2026.
New car sales were 650 units lower during the first half of 2026, while used car profitability declined as margins came under pressure.
Aftersales provided an area of resilience, with profitability increasing by 4% year on year during the first half.
The group has made structural changes to its senior leadership team in response to the tougher market.
It expects those changes to begin having a positive impact during the second half of 2026, although it anticipates a more challenging full-year result following the difficult start.
Endeavour still expects to record positive EBITDA for 2026.