Q&A: Hendy Jonathan Moritz
Hendy’s Chief Financial Officer Jonathan Moritz discusses the data that helps the business thrive and how EVs are changing the landscape
What measures do you use to assess your organisation’s financial performance?
On a purely financial basis, the most important measures for us are EBITDA and cash flow. We look at EBITDA in relation to budget and as a return on sales. As you would expect, we’re extremely focused on generating cash from our operations, with any net outflows only as of the result of investment activities that’ll enhance future EBITDA or cash flow. Underlying these are the normal operational KPIs, such as profit per unit, stock turn, workshop utilisation, efficiency and recovery rate, parts margin, and so on.
What data don’t you currently get that you’d like to see?
Nowadays, there’s already so much data around us that the challenge is often to be sufficiently focused on the really important information and taking the right messages from it. I don’t feel the need for more data, but more thinking time would be welcome.
What one thing about automotive retail would you change to make your job simpler?
Simplification by manufacturer partners in franchised dealerships would be enormously welcome. This ranges from over-complicated bonus schemes to stipulating the use of multiple specific systems. Reducing this complexity would minimise the administrative and cost burden on franchised dealers, leading to significantly improved returns with minimal adverse impact on the manufacturers themselves and none on the customers.
How much impact on your business will the switch to EVs have?
It’s one of many significant changes which will require the business to adapt rapidly. Short-term direct changes will be relatively minor, but the impact on workshop activity and skillsets will become increasingly significant. The indirect impact of massively increased demand for electricity may be at least as large as direct changes. It’s likely that regulatory requirements and commercial pressure will ensure the management of energy usage will become an important part of the future landscape for the sector.
What is your key focus for the next six months?
Finding ways of strengthening employee engagement and attracting new talent in an employment market where employees have plenty of choice, and looking after customers who may be frustrated by long and unpredictable lead times while new vehicle shortages persist.
What are your longer-term priorities?
Ensuring that we have top quality online capability, and reshaping our property portfolio to the changing demands of the sector. In the accounting team, the delivery of live or near-live management information in a clearly understandable format, and the introduction of AI to deliver routine processes will be the priorities in the coming 18 months.
What advice do you have for anyone looking to enter the accounting side of the automotive industry?
Motor retail is surprisingly complicated from a financial point of view, with particular challenges being the volatility of cash flow, and the high operational gearing. It’s also a quirky sector facing rapid and fundamental change, and full of interesting and sometimes challenging characters. So if all this sounds appealing to you, go for it, but choose your employer carefully. I would expect lots of consolidation in the sector, and those businesses without much focus on the future may get swallowed up.