Group 1 UK increased underlying operating profit by 88.4% to £38.1 million in 2025 following its acquisition of Inchcape’s UK dealerships.
The result, which excludes restructuring and impairment costs, reflected a full year’s contribution from the acquired businesses and early savings from combining operations.
The dealer group is removing duplicated overhead functions, aligning systems and improving dealership productivity following the 2024 Inchcape acquisition.
However, restructuring costs of £16.5m, impairments of £17.4m and higher interest costs contributed to a statutory pre-tax loss of £52m, compared with £26.2m in 2024.
Combining the enlarged business
Operating profit before restructuring and impairments increased from £20.2m in 2024.
Group 1 said combining operational structures and systems should deliver longer-term savings as it reduces the costs of running operations in parallel.
In the strategic report for the accounts, Daniel McHenry, Group 1 chief executive, said: “After excluding restructuring costs and impairments, underlying operating performance improved year-on-year, supported by the first full year contribution from acquired businesses and the early benefits of integration initiatives.”
Impairment charges followed decisions affecting certain franchise relationships, including the planned termination of JLR. These comprised £11.9m of franchise rights write-downs and £5.5m relating to tangible assets.
Interest costs increased from £35.5m to £57.6m.
Aftersales capacity increases
Group 1 increased its technician headcount from 1,512 to 1,628 to support growth in aftersales.
The group said the ageing UK vehicle parc was sustaining demand for servicing and repairs, describing aftersales as “a key driver of profitability and cash flow”.
Investment has focused on increasing capacity, improving workshop utilisation and customer retention, and meeting the technical requirements of EV servicing.
Management said continued aftersales growth remained a priority alongside cost savings, digital retail investment and customer experience.
Group 1’s Katie Martin and Mike Widdup will explain how customer retention supports aftersales growth and profitability at AM Live, NEC Birmingham, on November 11. Registration is free for qualifying automotive retail professionals.
Group 1 to share aftersales strategy at AM Live →
Sales volumes and margins improve
New vehicle retail sales increased from 43,026 to 56,234, while used vehicle retail sales rose from 59,706 to 85,067.
The 2024 volume comparisons have been restated to align with the US group’s reporting methodology.
Turnover increased from £3.23bn to £4.52bn, principally reflecting acquisitions completed in 2024.
Gross profit rose from a restated £433m to £617.5m, with gross margin improving from 13.39% to 13.66%.
Group 1 attributed the margin improvement to a favourable sales mix, MINI’s move to agency and continued margin management across its businesses.
The dealership network reduced from 114 to 109 during the year.
Group 1 said it would continue to dispose of underperforming or non-core dealerships and reinvest in locations offering higher returns.
The group also identified elevated interest rates, cost inflation and changing consumer demand as continuing challenges in 2026.
Cash generated from operations increased from £80m to £90.6m. However, net cash from operating activities fell from £45.4m to £34.9m, principally because of higher interest payments.
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