Turnaround for Foster Motors

The Foster Motor Company, one of the best-known car sellers in south Dublin, is forecasting further growth this year and next after it returned to the black in 2004 with a modest pretax profit of €82,902.

The turnaround followed pretax losses of €281,956 in 2003, a year in which it made a significant investment in new showrooms in the Sandyford industrial estate.

Managing director Ian MacNeill said the return to profit followed the completion of this initiative. "In 2003, we built our new showroom. In 2004, we would have benefited from an increase in sales," he said.

Newly-filed abridged accounts do not reveal the level of sales at the company, which sells cars and commercial vehicles under the Volkswagen marque and cars under the Audi marque.

Mr MacNeill said the company was likely to sell "close to 1,000" new vehicles this year and hoped to exceed that next year.

In addition to its new showrooms, the company recently opened a new after-sales unit in Sandyford. It now sells only second-hand cars at its original outlet on Foster's Avenue, Mount Merrion. These developments enabled the company to concentrate its efforts in the areas of new and used car sales and servicing, Mr MacNeill said.

The accounts show that Foster's gross profit rose to €1.45 million in 2004 from €917,274. After administrative expenses of €1.34 million, it turned an operating profit of €109,853. The retained profit of €74,923 brought the accumulated profits in the company to €682,009.

"The results for the year and the financial position at the year-end were considered satisfactory by the directors, who expect continued growth in the foreseeable future," said a directors' report with the accounts.

The company paid out no dividend to its three shareholders - Mr MacNeill, and directors Peter Quinn and Patricia Ferron. Directors' remuneration, including pension contributions, increased to €368,057 in the year, from €303,740 in 2003. The accounts also indicate that the four properties used by the company are rented or sublet from the three directors at a cost of €383,455.

The company employs 32 people in car sales and service and four in administration.

The accounts show it recruited six additional sales staff during 2004. The wage bill rose to €1.57 million from €1.18 million, while pensions cost €143,265.