Motor dealer warns of profit fall

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The Independent Online
Shares in Appleyard fell 5p to 60p yesterday after the motor dealer warned 1996 profits would be sharply down on the previous year and said the dividend would be cut.

Appleyard expects to unveil pre-exceptional, pre-tax profits of pounds 3.2m for the calendar year, compared with pounds 7.8m a year ago.

The company said that in the light of this "extremely poor result" it intended to recommend a reduced final dividend of 1.6p, making a total dividend for the year of 4.7p (6.2p).

Appleyard said the fall in pre-tax profits and dividends was a result of an "extremely disappointing" final quarter in its passenger car division, especially in relation to used car volumes and margins.

Appleyard expects to sell further dealerships as going concerns during 1997, with four in advanced stages of negotiation. The company also decided not to invest additional capital at eight locations owing to the absence of acceptable returns, it said.

Appleyard estimates these actions will result in an exceptional reorganisation charge of around pounds 8.6m in 1996, while actual and planned disposals are expected to generate approximately pounds 8m during 1997.

It said the commercial vehicle division and the contract hire and leasing business, jointly owned with Barclays Bank, were unaffected by this review and continued to operate profitably.

The company said the start to the year had "on the whole, been encouraging", with order intake in the contract hire and leasing business being ahead of budget.

Appleyard will split the roles of chairman and chief executive from the end of 1997. Mike Williamson, group chairman and chief executive, will relinquish all executive duties on 31 December and become non-executive chairman.

Negotiations to appoint a new chief executive are said to be at an advanced stage.

Appleyard's full-year results are due on 14 April.