Cotswold Motor Group increased operating profit by 26.5% to £6.67 million in 2025, supported by stronger used car sales.
The car dealer group’s operating margin improved to 2.76% from 2.36%, while pre-tax profit increased 49.3% to £4.57m.
Accounts for the year ended December 31, 2025, show turnover increased 7.9% to £241.43m, compared with £223.65m the previous year. Gross profit rose 9.2% to £23.29m.
Used car growth offsets new car pressure
Used car sales volumes increased 31%, helping the group achieve a record year for vehicle deliveries.
Directors said some of the increase reflected manufacturer vehicle holds that had reduced deliveries in 2024. Higher used car volumes and profitability also supported improved margins.
New car sales volumes fell 5%, while battery electric vehicle targets continued to put downward pressure on new car margins.
The group also highlighted the impact of MINI’s move to an agency sales model in March 2025.
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Changes to sales processes and systems caused disruption within the Mini team and contributed to reduced new car profitability. However, directors said the team had managed the transition well and delivered a strong result.
Mini switched to an agency sales model in 2025, with customers able to purchase online and dealers facilitating the customer handover.
Aftersales profitability remained largely flat despite a 3% reduction in labour hours, primarily associated with lower warranty activity.
The group said most of the continuing warranty work from previous years, including EGR recalls, had been completed during 2025, with no large warranty claims following.
Directors identified close monitoring of the cost base as a continuing priority for 2026.
Profit after tax increased to £3.19m from £2.38m.
Higher stock holding increases stock turn
Cotswold ended the year with approximately £6m more stock than in 2024, following a deliberate decision to increase its inventory ahead of Q1 2026.
Average stock turn consequently increased to 69 days from 63 days, against the group’s aim of keeping it at or below 60 days.
Directors said year-end purchasing opportunities could justify a temporary increase in stock turn, although they acknowledged that higher inventory ties up working capital and increases exposure to price movements.
The strategic report also outlined work to develop future growth opportunities during the second half of 2025.
This resulted in a lease on an additional property and the introduction of Geely to the group after the year-end, extending its franchise portfolio beyond BMW and Mini.