Cost control, acquisition and year-on-year growth boosts
HCVS. Claire Hack reports.
Hitachi Capital Vehicle Solutions
(HCVS) reported a rise in turnover of 3.77% to £108.9m in the year
to 31 March 2010.
The company’s non-consolidated
results showed profits after tax more than tripled to £8.1m in the
year to 31 March 2010, up 324% from £1.9m in 2009. Lower finance
costs and a significant recovery in the used car market contributed
to the increase.
James Worraker, head of finance at
HCVS, said: “In 2008, the whole market saw a drop in used vehicles
which meant HCVS needed to make impairment provisions for the
future disposal of leases. That had a big impact on results. But
when we moved into 2009-10, profits improved back to levels seen in
The recovery in the used car market
meant less provisioning was required, providing a further boost to
profit. The rise in profit was also linked to the acquisition of
Aylestone-based Robinsons Garage, which provides cars to driving
instructors under contract hire agreements.
“In 2008, we only had three or four
months’ contribution from the acquisition, but in 2009-10, we had
the full year benefit,” Worraker said
The company also reduced its head
count and implemented stricter cost controls. Commercial vehicles
were a source of growth with business from Centrica, Apetito,
Sainsbury’s and Southern Water. Business has also been written with
telecoms giant O2 and A&N Media, the consumer division of Daily
Mail & General Trust, in the last 12 months.
Worraker predicted that government
cuts will restrict future growth. “The cutbacks will affect our
customers in the public sector and also those supplying the public
sector. We have to monitor that and be wary of it. It’s not that we
think there will be undue risk, but it may have an impact on
growth,” Worraker said.
New business volumes in 2009-10
fell to £109m, down 9.17% from £119m a year earlier. HCVS continued
to win new public sector business from the Environment Agency and
the Audit Commission.
Worraker said the company is well positioned for the future
thanks to support from Hitachi Capital UK.