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Outlook improving, says Central Motor Auctions

CENTRAL Motor Auctions believes the tide is turning in the second-hand car market, despite reporting a decline in volumes in the first half of its financial year.

Auction proceeds were 5.6 per cent lower at pounds 144m and profits before tax fell from pounds 432,000 to pounds 347,000 in the six months to 30 April.

Steve Kendall, joint managing director, said that April saw a sharp fall- off in the number of vehicles coming to auction after flat volumes over the previous five months.

The trend continued in May, but Mr Kendall said he was hopeful the decline was at an end. There were signs that more vehicles were starting to flow back to auctions.

'There has been a real shortage of low-mileage vehicles as companies and individuals have run their cars longer through the recession,' he said. 'But as retail demand picks up there should be more second-hand cars coming through.'

Only 7 per cent of cars sold by Central are from private motorists. Fleet sellers account for 65 per cent, trade sellers for 28 per cent.

The fall in profits masked a better result at the operating level. Profits were inflated in the first half last year by proceeds from a property disposal.

Mr Kendall said: 'We are delighted with the better operating profit, but disappointed that volumes have declined.' He attributed the improvement to cost controls and better efficiency levels because, although there were fewer cars in total, a higher proportion were sold.

The dividend is maintained at 1p despite a fall in earnings per share to 1.8p (2.7p). The shares fell 9p to 131p.