Henly's profits drive home freedom point

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The Independent Online
HENLY'S has demonstrated why acceptance of the 85p per share bid by the rival T Cowie motor group 18 months ago would have been tantamount to giving the company away.

The price climbed 7p to 352p as Henly's rolled out annual profits of pounds 7.3m, against a pounds 2.1m loss in 1992, and prepared for ambitious expansion by launching a pounds 26m cash call.

Cowie's shares have also risen strongly since the bid, to 328p, but that would value Henly's paper at only 265p on the original bid terms.

Henly's investors are now being asked to repay pounds 17.6m of debts, buy control of the Roadlease Contracts associate and provide a pounds 10m cash pot for acquisitions by buying one share for every four held at 280p.

'Over the next four years we would like to increase the number of our dealerships to 50-plus,' Robert Wood, chief executive, said.

The rights issue comes with a promise, barring any accidents, of a 66.6 per cent increase in dividend payments this year to 7.5p. Henly's yesterday announced a 3p final for 1993, which itself raised the total payout 50 per cent to 4.5p.

Henly's existing 36 car, truck and van dealerships saw operating profits rise from pounds 5.7m to pounds 7.3m last year, driven by 18 per cent growth in new car sales. After- market sales - car servicing and parts - were static, but still yielded 60 per cent of the division's profits.

The coach and bus operations turned losses of pounds 2m into profits of pounds 1.9m.

Overall, Henly's is confident about prospects. Analysts expect profits, which will benefit from a big erosion of last year's pounds 2.4m interest bill, of pounds 11.5m for 1994.