Dagenham Motors calls for pounds 10m

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The Independent Online
DAGENHAM MOTORS is taking advantage of the buoyant state of the vehicle distributors sector with a pounds 10m cash call to reduce debt. The group announced the two-for-five rights issue as it reported a 59 per cent rise in pre-tax profits to pounds 2.4m in 1993.

David Philip, Dagenham's chairman, said the company's rapid expansion had left the company with a level of gearing - 125 per cent - that made some City observers uncomfortable.

'We are perfectly happy with our financing, but it makes sense to recapitalise the balance sheet to allow us room for further expansion,' he added.

He said the recession had turned the corner in the South- east and Dagenham, a Ford and Iveco trucks specialist, was benefiting particularly from the strong performance of the Ford Mondeo.

Gearing will fall to about 45 per cent after the rights issue, which is priced at 153p a share, a discount of 40p to Dagenham's closing price of 193p yesterday.

Barr & Wallace Arnold, the motor dealer and leisure group, reported a 19 per cent rise in profits to pounds 4.4m in 1993. Most of the improvement came from the motor division. Conditions remained difficult in holidays and leisure.