Executive Summary
FY24 (Aug 2023 – Aug 2024) was Elite’s weakest year in recent history. This analysis documents the causes, confirms they are being addressed, and builds the recovery narrative for buyer due diligence.
- US Export Sales Collapsed: Down $2.1M (−37%) — this is the #1 factor, accounting for 62% of the total revenue decline
- Domestic Retail Down: Down $1.0M (−7%) — fewer units sold
- Service Held Steady: Actually up slightly (+1%) — bright spot
- Gross Profit Down: Down $360K (−11%) — margin compression
- OpEx Stable: Only down $53K (−2%) — costs didn’t flex with revenue
Net result: Pre-tax profit dropped from ~$439K (FY23) to ~$132K (FY24)
Greg’s Context & Explanations
1
US Export Collapse
US sales dropped $2.1M (−37%) from FY23 to FY24. This was the #1 driver of the decline.
Greg’s Response
The US market comes and goes in cycles. Usually 2–4 years. Inventory availability, strengthening CAD, post-COVID issues, higher interest rates have all contributed to less demand down south. Add to that, all US-bound vehicles must sit for 30 days before they are able to be sold — creates uncertainty and adds risk when we are in a fluctuating market. We suffered big losses on the down slide as a result in 2024–25.
2
Retail Unit Decline
Domestic retail revenue dropped $986K (−7%). Appears to be fewer units sold.
Greg’s Response
Coming out of COVID when everyone was flush with money (partially from government handouts) and spending it, I believe the decline is part of the spending hangover as a result of all the disposable cash on hand being used up. Another factor is that inflation rose dramatically — this forced interest rates to climb dramatically, which is obviously a big factor on big ticket items like vehicles. From everything I heard at the time, most businesses and dealerships were feeling the same downward slide. I spoke to one of our bank/insurance reps yesterday about current conditions. He feels the same as I do. He has many customers like us under his umbrella. He related that all of his RV dealers and sport/rec dealers (boats, ATV, motorcycles, etc.) are still suffering as interest rates have crushed their non-cash buyer segment, which is 70% of their business. Some are barely hanging in there.
3
Staffing Changes
You mentioned aging techs and sales turnover in our discussions. What specifically happened in FY24?
Greg’s Response
There is always turnover in the sales department. Finding and retaining good sales staff is an issue not just for us but all dealers. This has always been problematic. The rest of staff are mostly long-term happy employees. With regards to mechanics — as they age out, and with limited young people entering the tech trade, the availability to attain any (let alone decent) mechanics has decreased. This has led to higher demand in wages, increasing costs. Every dealer in BC has ads running for tech employment.
4
Inventory Issues
Was vehicle availability/quality a factor in FY24? Harder to source good inventory?
Greg’s Response
Yes. A good point to note: even if sales stayed at 38 per month average, a slight shift in inventory towards newer vehicles that qualify for financing would drive a much higher penetration in F&I. Also, it’s easier to sell a customer on a payment amount rather than total cost. AND it’s also much easier to hold front-end gross on finance customers. Think about 75% F&I penetration on 38 vehicles as opposed to our average of 50%. That’s another 9.5 sold units @ our 2025 F&I average of $1,900 × 12 months =
$216,000/year net bottom line increase. Plus whatever front-end gross we would hold over and above that — possibly another $2–500 a copy. Again… it all boils down to a strong retail inventory.
5
Market Conditions
Were there external factors? (interest rates, economy, competition, etc.)
Greg’s Response
See above.
6
What Changed
What specific actions did management take to address these issues?
Greg’s Response
Moving forward — we have noticed recently there are more people looking for employment. We receive more resumes when we are advertising for employees (except for the shop). We have a reputation as being a place to work at that is local, family-owned, community-minded and honest. We are starting to attract good people that are looking to exit the big dealership box stores due to pressure and competition within them.
7
FY25 Recovery
FY25 revenue recovered +7% vs FY24. What drove the improvement?
Greg’s Response
No response provided.
8
Confidence Level
How confident are you that FY24 issues are fully resolved and won’t recur?
Greg’s Response
For 2026, we have increased our sales staff to 6 from 3–4. We have added a second business office manager and are formulating a plan to increase our inventory quality and quantity with the addition of a wholesaler strictly for the lot.
Korey had a guy helping him with purchasing for US export. As things slowed he was let go, but the last 10–15 vehicles he purchased cost us somewhere around $50K in losses. Not sure this qualifies as a one-time expense but it sure hurt the bottom line for fiscal 2025.