The group made pounds 4.8m before tax in 1992, against pounds 1.1m the previous year. Turnover rose only 9 per cent, but profits flowed through from harder rental rates.
Peter Dawson, chairman and chief executive, said: 'Dawsonrentals laid the foundations for recovery, with short-term rental proving very attractive to business.'
Michael Williams, commercial director, explained that more transport companies had turned to renting vehicles as their own fleets aged.
'Throughout the country, operators have been reluctant to tie up capital by buying or entering into long-term contract-hire arrangements. That is why they are renting and the increased demand has helped harden prices.'
He said new units that improved the quality of Dawsongroup's fleet had also helped to fix higher prices.
The rentals division's pre-tax profits jumped 329 per cent to pounds 4.2m, on an increase in turnover in line with the group figure.
Mr Dawson said that contract hire remained flat because of companies' reluctance towards long-term commitments.
Dawsongroup's Volvo truck dealership saw a 49 per cent jump in turnover to pounds 23m, but most of that was accounted for by the group's own purchases of units for the rentals business.
Capital expenditure totalled pounds 20m, double depreciation of pounds 10m. But the ratio of debt to shareholders' funds - always high in a leasing business - fell to 118 per cent from 125 per cent.
Mr Dawson said that he expected the problems at Leyland DAF to boost Volvo truck sales.
Earnings per share rose to 10.4p (2.7p) and the dividend is doubled to 3p. Dawsongroup shares jumped 9p to 202p.
Mr Dawson said that 1993 had begun well, but that the market was still fragile. 'But I believe there is more organic growth to come in our market.'Reuse content