Motorworld delivers on flotation promises: Retail arm powers growth at motor parts group

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The Independent Online
MOTORWORLD, the motor parts and accessories group, delivered on the growth promises made when it floated in February, producing pre-tax profits of pounds 1.5m in its first set of interim figures.

The result would have been pounds 1.7m, a 12 per cent rise, had the group had the benefit of the flotation proceeds for the full six months to 2 May. Total turnover was pounds 2.1m higher at pounds 18.7m, with most of the growth coming from the retail division.

Sales from Motorworld's 187-outlet network were 21 per cent higher, but stripping out the newly opened shops' performance gave like-for-like growth of 7 per cent.

Darrell Kershaw, managing director, said: 'Our progress has been exactly in line with our expectations: we've opened 14 shops since the beginning of the financial year; seven since flotation. We closed one, at Preston, because if a shop doesn't make money, we bite the bullet and close it down.'

The organic growth in sales was largely due to training staff to sell more products to customers, he said. The group also plans to continue increasing its number of outlets.

'We still have no branches in Scotland or the south of England, but we'll spread using the same formula of low-overhead premises on busy arterial roads.' Acquisitions of chains or single shops were also a possibility.

'With 4,000 accessories outlets in Britain, there's a long way for us to go,' Mr Kershaw said. 'We're also beginning to spread out our in-car entertainment fitting service, Eurocar, through the network, which gives us another basis for expansion.'

Motorworld is paying a debut interim dividend of 2.3p on earnings per share of 8.1p (7.3p pro forma). The shares, which were floated at 210p, stuck at 291p.