Surging car prices and demand drive revenues at Denis Mahony to €88.3m

Covid-related car shortages helped drive revenues at Dublin auto group Denis Mahony up by 25 per cent to €88.3 million as the Toyota and Lexus dealer hailed a “strong trading performance” in 2022.

After-tax profits at Denis Mahony Holdings surged 34 per cent to more than €6.3 million in the year to the end of October last from €4.7 million in 2021, according to recently filed consolidated accounts for the group.

Founded by former Dublin footballer Denis Mahony in 1963, the group – which comprises three Lexus and Toyota dealerships near the M50 in Dublin, a car rental business as well as workshops and vehicle servicing operations – remains in family control following Mr Mahony’s death in 2017 at the age of 88. According to the filings, the Denis Mahony group is owned by Mr Mahony’s son, group managing director John Mahony, through Derryhale Estates Unlimited.

In a note attached to the accounts, the directors said 2022 was a strong trading year for the group. “A shortage of new cars led to high demand and improved profitability for both new cars and second-hand cars.”

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Vehicle sales at Denis Mahony topped €80.5 million in the year to October 2022, up from €64.7 million the previous year.

Automakers struggled with supply chain crunches and shortages of key materials during the Covid-19 pandemic, affecting output and leading to a sharp spike in new car prices. Simultaneously, a steep decline in the number of used cars entering the Irish market from the UK post-Brexit has pushed the retail cost of second-hand vehicles up by more than 79 per cent since the start of the pandemic, according to recent figures from DoneDeal.

The directors also said the group experienced “very strong” demand for aftersales services including vehicle servicing and parts sales with revenues reaching €7.6 million in the year, up from €6.3 million.

Meanwhile, operating lease income from the group’s car rental business – which was rebranded as Mahony Fleet from Avis Fleet Solutions last November – more than tripled from €27,606 in 2021 to €96,580.

Having sold vehicles to “various financial institutions” that then leased out the cars to customers, Denis Mahony group has “committed to repurchase these vehicles at agreed residual values at the termination of the leases”, according to a note in the accounts. The group had total outstanding repurchasing commitments of around €13.8 million at the end of the reporting year.

Meanwhile, staff costs at the group, which slightly increased its headcount from 91 to 93 last year, jumped by almost a quarter to €6.9 million from €5.3 million while directors and key management were paid €872,741.

The directors said they “acknowledge the hard work and dedication of all staff who continue to drive the business forward”.