Profits warning hits car dealers
Saturday 13 June 1998
Car Group shares plunged 44 per cent to 85.5p after the company said it had been hit by depressed demand in the used car market and an "exceptional two-month price fall". Peter Floyd, the company's finance director said prices on some models had fallen by 10 per cent in the last two months.
Car Group said its results for the year to August would be significantly affected, prompting analysts to cut their profit forecasts from pounds 7.6m to between pounds 4.5m and pounds 5m. The warning led to downgrades on rival car dealers such as Quicks. Analysts said that others such as Arriva, the former Cowie Group and Dixon Motors might also be vulnerable. Car Group's shares were priced at 138p when the company came to the stock market in November 1996.
The Car Group pioneered the concept of car supermarkets in the United Kingdom. All its sites, which trade under the National Car Supermarket name, are in the Midlands or the North and Mr Floyd said its base in Britain's manufacturing heartland was a factor in its problems. He said: "The strong pound has hit manufacturing industry and that is where we trade. The strong pound has also enabled manufacturers to offer good deals on new cars which may have affected demand on older models."
The company reduced stock levels but now feels prices might be settling and so has resumed normal purchasing patterns.
Car supermarkets are a growing phenomenon in the UK. A rival group CarLand launched to great fanfare in January. It is spending pounds 25m developing indoor car supermarkets. Most of Car Group's are outdoor sites.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...