A car retailer boosted turnover by almost a fifth as it contined its expansion across the South East.

KAP Motor Group, founded more than six decades ago as Kent Auto Panels in Folkestone, where it still has a dealership, increased revenues by 19% to £73.9 million last year.

The car seller, which has five branches including sites at Ashford and Canterbury, said it had enjoyed a “generally good year for the business” as it managed a small increase in gross margins.

However, operating profits were down 26% to £684,000, with pre-tax profits reduced by 36% to £474,00 according to its latest accounts filed at Companies House. Final profit actually improved marginally by 2.7% to £555,000 after tax calculations.

The company, which sells a range of new and used brands, is trying to grow the franchised dealer section of the business and has completed the acquisition of sites in Brighton to relocate its Suzuki dealership in the city and create a new Vauxhall retailer there. It aims to have them open early next year.

“It is envisaged that margins will be temporarily eroded during 2016 when the non-productive costs associated with Brighton development plans come to fruition..." - Colin Furneaux, KAP Motor Group

In Canterbury it opened as a full Suzuki dealership in January 2015 and had a successful year, hitting its targets for new and used car sales.

Established franchises performed solidly across the group “although there is evidence of the new car market being pushed by the manufacturers to non-sustainable levels”, according to company secretary Colin Furneaux.

He said the business operated in a “challenging and competitive environment”.

“The company will be in an enviable position when the Brighton developments are complete and the increased franchise base is established for the future,” he said.

“It is anticipated that this will become the busiest of the group’s dealerships.

“It is envisaged, however, that margins will be temporarily eroded during 2016 when the non-productive costs associated with the development plans come to fruition.

“The main risk in new car trading is being caught up in the ever-increasing target spirals when eventually bonus earnings are lost.

“Care must be exercised to ensure that we do not trade at a loss within our new car dealerships chasing ever distant bonus earnings.”

However, he added, this was “an industry-wide issue”.