Cowie rises 34% to pounds 24m helped by contract hire

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The Independent Online
T COWIE, the motor dealer and leaser, saw pre-tax profits rise 34 per cent to pounds 24.3m last year, with nearly all the increase stemming from a strong performance at its contract hire unit.

Sir Tom Cowie, chairman, said: 'While we have made more profit before, these are the most pleasing results I have seen.' '

Profits from Cowie Interleasing, the UK's biggest contract hire operation, rose 50 per cent to pounds 16.6m, helped by lower interest rates and acquisitions made early in the year.

Cowie now has a fleet of 60,000 cars, representing about 5 per cent of the total UK market, and thinks it can cope with 100,000 vehicles without a significant increase in overheads.

Motor dealerships had a tougher time, especially during the final quarter of the year after sterling was devalued. Profits slipped from pounds 6.6m to pounds 5.5m, with used car prices especially under pressure. Cowie, which supplies one out of every 50 new cars sold in the UK, is seeing volumes of new cars pick up and expects shortages to lead to firmer margins in used cars.

Grey-Green, Cowie's London bus and coach operator, saw profits rise 46 per cent to pounds 1.8m with all routes, including the 13 under contract from London Transport, profitable.

Paddy Barrett, an analyst at Albert E Sharp, said the figures were in line with high expectations.

He pointed to Cowie's 'five bites of the cherry', the opportunities for the motor division to pick up business from the leasing side and vice versa. He forecasts pre-tax profits this year of pounds 30m.

Turnover was 7 per cent higher at pounds 606m, earnings per share rose 20 per cent to 13.4p and a final dividend of 4.25p makes a total for the year of 6.25p, a 28 per cent improvement. The shares ended 14p higher at 211p.

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