2021 Yearend Review
Despite the uncertainties surrounding Covid19 as we entered 2021, with lockdowns, furlough and the need to adapt and work flexibly, the year turned out to be very satisfactory. Amongst all the turmoil, we successfully implemented the new JAAMA computer system early in the year with training and implementation being conducted remotely over Teams and Zoom which was a remarkable achievement in itself by everyone.
Vehicle availability was a constant problem throughout the year and remains so with manufacturers struggling to build cars owing to factory closures during lockdowns around the world and a shortage of semi-conductors, which are fundamental in the structure of all modern cars. This has led to long lead times for customers and has had knock-on effects in terms of long extensions of existing contracts, which impacts on company funding levels, and shortages of vehicles being returned into the used market. The positive effect of this has been a significant increase in the values of used cars and a consequent increase in used vehicle profits.
We have seen a modest increase in Contract Hire Rentals Gross profit and Maintenance Gross Profit, though the fleet size has fallen slightly. Conversely, the Fleet Managed Fleet has increased by 17%. However, the Gross Profit on Disposals has increased by 125%.
Unfortunately, profitability collapsed in the Daily Rental area, seeing a reduction of 98% in profits which necessitated closing the Flexifleet department to direct selling and reverting to servicing existing customers through Maintenance and Outsourcing.
The Brokerage, though still loss-making in 2021, saw significant improvement and is now generating strong profits in 2022.
Despite expenses increasing by 27%, as a result of Disposal values net profit increased by 82% yielding the best profit TCH Leasing has produced. However, with interest rates, energy costs and inflation generally increasing at levels not seen since the 1970’s, we need to be focussed to ensure that we maintain profitability moving forward as business never stands still and we can’t rest on our laurels.
Thank you to everyone for all your efforts in producing an excellent result in 2021 and I look forward to continued progress in 2022.
Regards
Mark Hammond
