LDV seeks overseas allies

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The Independent Online
LDV, which emerged out of the collapsed Anglo-Dutch DAF group and is Britain's second-largest van maker, plans alliances worldwide to reduce dependency on the home market.

The company, which will today announce a sharp rise in profits, has signed deals in South Africa and Poland where LDV vehicles will be sent in kit form to be assembled and distributed.

LDV may set up similar deals in India or other emerging markets, seen as the route to expansion now that established European markets have been monopolised by big players. Allan Amey, chief executive, said he would not rule out an equity stake in an overseas partner.

LDV's pre-tax profits for 1994 were £18.3m on turnover of £150.5m. Comparison with the previous year is complicated by the DAF crisis, but in the eight months to the end of 1993 the operation made profits of £7.1m on turnover of £63.7m.

Sales rose 23 per cent, outpacing the 16 per cent growth in the UK market. Output is running at 300 vans a week, with sales underpinned by the buoyant fleet market. Like the car industry, retail sales in the van business remain poor.

LDV was a five-man management buyout when the DAF group folded two years ago. Mr Amey said the West Midlands business was profitable but constrained within the larger group.

Its UK market share is about 13 per cent, compared with Ford's 50 per cent, and Mr Amey said the company was aiming for about 15 per cent."We are looking overseas for expansion and a broader customer base," he said.

The company is nearing the end of a £30m capital spending programme, and believes future investment could be financed out of profits.

Mr Amey did not rule out floating on the stock market, but said there was no pressure to raise new capital.

Nor was there pressure from 3i, which backed the buyout, to unlock its investment.

About 40 per cent of the company is owned by the directors; five per cent by managers; 10 per cent by an employee share ownership scheme and the remainder by institutions.