Car industry gets into gear with rights and acquisition

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The Independent Online
TWO rights issues and an acquisition yesterday signalled a resurgence of corporate activity in the motor industry. Following a string of improvements in car registration figures, the deals provided further evidence that the sector is beginning to recover from four years of severe recession, writes Tom Stevenson.

Sanderson Murray & Elder doubled its size by buying Skipper, a Yorkshire-based chain of Ford, Vauxhall and Japanese dealerships. The pounds 26m deal will be part-funded by a rights issue to raise pounds 17m.

Elsewhere, Davenport Vernon, which has grown from 14 to 22 outlets since its flotation in 1989, raised a further pounds 6.4m to fund acquisitions. None was announced yesterday but Ralph Denne, the chairman, said he was looking at 'a number of proposals'.

Davenport also announced an 11 per cent pre-tax profit rise for the six months to March to pounds 895,000.

Sanderson's purchase, from RTZ, represents the latest stage in a comeback by its chairman, Tony Bramall, one of the most successful motor dealers of the 1980s. He built up his previous company, CD Bramall, through a string of acquisitions before selling out to Avis, the car rental firm, in 1987 for nearly pounds 100m.

Three years later he bought a 50 per cent stake in Sanderson, then a textiles company shell, with the aim of building up another substantial motor group. Skipper adds 11 dealerships to the group's existing 10 sites.