Cowie wins contract to manage CU's car fleet: Evidence of motor industry recovery as interims rise 28%

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The Independent Online
T COWIE, the car sales and leasing group, has made its first move into fleet management, signing a contract to manage Commercial Union's company cars. Cowie wins contract to manage CU's car fleet

Gordon Hodgson, chief executive, said it was a very good deal, although he could not reveal details because of a confidentiality agreement with CU.

However, it is understood that the contract is to manage a fleet numbering more than 10 per cent of Cowie's existing contract hire fleet, which has 60,000 vehicles.

Cowie's interim results, also announced yesterday, provided more evidence of recovery in Britain's battered motor industry. Pre-tax profits rose 28 per cent to pounds 15.5m.

Mr Hodgson said orders for August were 20 per cent ahead of last year at Cowie dealerships and 15 per cent higher at the recently acquired Keep Trust dealerships. Cowie shares fell back 11p to 256p, despite a 17.5 per cent jump in the interim dividend to 2.35p on earnings per share of 8p.

Analysts said the dip was probably caused by market surprise at the company's higher-than-expected tax charge at 33 per cent.

Alasdair Stewart at Carr Kitcat & Aitken said: 'The charge had been expected to fall from last year's 30 per cent, but the company was adamant it will be lower for the full year. And the shares have had a very good run recently.' Cowie Interleasing, the UK's biggest car leasing and contract hire business, made the bulk of the group's profits, contributing pounds 10.7m, a 31 per cent increase.

The motor dealerships saw turnover rise from pounds 175m to pounds 249m and made pounds 3.7m before tax, a 6 per cent increase. The Keep Trust dealerships, bought in May for pounds 28.6m, contributed pounds 440,000.

New car sales at the Cowie dealerships were 14 per cent ahead, while the Keep Trust outlets recorded a 9 per cent rise in sales.

The Keep Trust purchase brought Cowie's total number of dealerships to 42, but Mr Hodgson said he would be disappointed if the figure had not risen further by the year-end.

Cowie's London bus and coach operator, Grey-Green, saw profits fall slightly to pounds 781,000 despite a 9 per cent rise in turnover to pounds 7m. Mr Hodgson said more third-party insurance claims had led to a rise in the company's premiums. He said Cowie was interested in buying one of the London bus companies soon to be privatised.