Lex drives ahead to pounds 21m and lifts payout: Confident motor group buys Arlington dealers

Click to follow
The Independent Online
THE MOTOR industry and the City were cheered yesterday by better-than-expected results from Lex Service, Britain's biggest car dealer, which also announced the purchase of 36 more dealerships.

The group, chaired by Sir Trevor Chinn, boosted profits before tax and exceptional items by a third to pounds 21.2m for the six months to 27 June and said orders for the crucial month of August were well ahead of last year.

The City had been expecting a slight drop in profits from last year's pounds 16m after Lex lost the franchise to import and distribute Volvos.

Sir Trevor said a 17.5 per cent rise in the interim dividend to 4.7p indicated the group's confidence about what he described as a buoyant car market. Lex shares were marked up 18p to 411p.

Yesterday's acquisition of the Arlington group of 36 car and truck dealerships from Unigate consolidates Lex's position as market leader. The group is paying a total pounds 49.5m for Arlington, whose purchase brings Lex's total number of car, van and truck dealerships to 129.

Sir Trevor said the deal would increase the group's market share from 3.1 per cent to 3.6 per cent.

He added that order books for August, by far the biggest month for new car registrations, were 34 per cent ahead of last year.

But Lex will have a smaller second-half contribution from Arrow Electronics, the US group. Lex sold the bulk of its Arrow shares in May for pounds 97m, which added an exceptional boost of pounds 60.1m to yesterday's figures.

Sir Trevor said the like-for-like rise in profits would have been 36 per cent had there been no Volvo concession in the first half last year.

The Arlington acquisition is the latest in a flurry of deals. The group, which recently won the Hyundai franchise, has bought Lucas's Autocentres and TSB's Swan National car dealerships.

Comments