Crisis, what crisis? asks sparkling Reg Vardy Pent-up demand helps luxury car sales accelerate 94%

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The Independent Online
Reg Vardy, the motor dealer, yesterday rejected suggestions of crisis in the car industry after reporting record interim profits on the back of a sharp rise in sales of luxury vehicles.

The shares jumped 13p to 165p on news that profits in the six months to October had risen from £3.5m to £5.02m.

Peter Vardy, chairman, said demand was strong and the fall-off in sales of new cars simply meant buyers had switched to second-hand models.

"The business is there if you are aggressive enough to go out and get it,'' he said.

Motor manufacturers had cut dealers' margins to the bone, and were realising that distributors were making more money out of promoting second-hand vehicles. "This year will see manufacturers allowing more profits to come into the dealerships,'' Mr Vardy

forecast.

The group's sales of new and used vehicles were up from 16,486 to 21,118 in the period. Turnover rose 29 per cent to £184.6m. New car sales were up 8 per cent, against a general increase of 7 per cent, according to latest figures yesterday from the Statistics Bulletin.

The best performance came from the specialist division, where sales of Rolls-Royce, Jaguar, Ferrari and Mercedes rose 94 per cent. However, performance was helped by pent-up demand for the delayed new Mercedes C-class model. Sales of the long-awaited ne

w Jaguar XJ Series, launched in October, will feed into the second half.

Analysts said the profit figures were even more impressive when a £460,000 contribution from property sales was stripped out - up 69 per cent. Last year's figure was boosted by an £800,000 property sale.

The broker BZW has raised its full-year profit forecast by £500,000 to £10m. Reg Vardy is paying a 2p interim dividend (1.4p), which Mr Vardy said reflected the board's intention to distribute the total dividend more evenly between the two halves. Last year's total was 4.6p. BZW has forecast 5p for this year.

The company, which owns 29 dealerships, still has a target of 40 outlets in the medium term. Acquisitions were planned for this year, Mr Vardy said.

In March, the group will take on the Toyota dealership in the Sunderland area.

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