Restructuring for firm after ‘fantastic’ year
ABUSINESS connected to one of the South West’s largest car dealerships Murray Volkswagen has gone into liquidation – but it is part of a restructuring of the £59.9million-turnover group and its large Plymouth showroom is not closing.
Murray Plymouth TPS LLP, a partnership within a wider group, has appointed liquidators to wind it up and call for creditors to come forward.
But joint liquidators at accountancy firm Bishop Fleming stress the business is solvent and notices posted on The Gazette public record say it is being wound up voluntarily.
At the large Murray Volkswagen HQ in Millbay, Plymouth, a spokesperson said a restructuring of the business was taking place, and that the showroom would not be closing after having had a “fantastic year” despite being affected by the coronavirus restrictions imposed by the Government.
In fact, documents filed in November 2020 at Companies House for parent firm Murray Holdings (SW) Ltd, which is not part of the liquidation, reveal that despite being £300,000 down on profits at the end of May, due to having to shut during the first lockdown, the business has rebounded well.
A Group Strategic Report said: “Since fully re-opening in June 2020 the business has experienced strong demand in all sectors. New and used vehicle sales and aftersales.
“This is in line with the UK Volkswagen Group network and UK Automotive industry market. As a result of this at the end of August the business is currently operating at a level above that of the equivalent period in 2019.”
Award-winning Murray Holdings was set up in 2001 and sells Volkswagen and Skoda cars at its showrooms in Plymouth and Newton Abbot. It also has a parts business in Plymouth and a used cars operation in Ivybridge.
Founder and managing director Kevin Murray started his career as a commodity broker in the City and at the time was the youngest trader on the floor to trade under supervision.
In 2020 Murray Holdings was named as the 46th largest business in Devon and Cornwall in the 2020 Western Morning News Annual Business Guide.
Its Annual Report and Financial Statements for the year to the end of 2019, filed at Companies House in November 2020, revealed that group turnover for 2019 was £59.9million, down from £60.3million in 2018 but up from £56.7million in 2017.
It said the 0.5% drop in earnings for 2019 was because vehicle sales fell 8%, mainly due to a decline in new car sales in Plymouth, which dipped by 17% year-on-year and resulted in a “much tougher year”. But aftersales turnover across the group jumped by 7%. Net profit after tax was £274,000 in 2019, from an operating profit of £602,000. This latter figure was down from £793,000 in 2018 and £991,000 in 2017, as overheads and direct costs continued to rise and the firm invested in new technologies and its staff.
The report said that following the arrival of the Covid-19 virus to the UK, the company closed its showrooms during the first lockdown, with only seven managers working remotely. It was able to reopen fully from June, but still with some staff working from home and the introduction of safety precautions at the showrooms. Many staff had been furloughed under the Government’s Coronavirus Job Retention Scheme, but all were back by September.
However, the company, which had more than 170 workers in 2018, lost 10 employees in 2020.
The Murray Group’s report said Brexit uncertainty remained a concern, having had an impact on buyer confidence, squeezing margins and gross profit.
It said that uncertainties around whether there will be a trade deal between the UK and the European Union presents a risk to the company and a “lack of agreement” could lead to “additional complexities in importing new stock from the VW
Group” which is headquartered in Wolfsburg, Germany. Stock levels have increased because of the importation of “as many new vehicles to the UK as possible prior to the final Brexit deadlines to avoid additional port taxes from Europe”.
Luke Venner and Malcolm Rhodes of Bishop Fleming were appointed joint liquidators of the limited liability partnership within the larger group and Mr Venner said: “I must emphasise that this is a solvent liquidation and it was done as part of a group reorganisation/restructuring exercise. Malcolm and I, as joint liquidators, are helping to facilitate that.”