Reg Vardy warns of lower new car sales
The company echoed the recent glum tone struck by the industry trade body, admitting that trading in the first three months of its second half had been "subdued". It said full-year results would be at the bottom end of analysts' expectations, prompting its shares to fall 25.5p to 504.5p.
The warning from Reg Vardy - in which Jack Petchey, the octogenarian property investor, is a 6 per cent shareholder - knocked shares across the car dealership sector. Pendragon's shares dived 4 per cent to 294.25p, while HR Owen slipped 5p to 222.5p.
The Society of Motor Manufacturers and Traders last week reported a 21.2 per cent slump in new car sales to private customers in January. It said total UK new car sales in the month were down 8.2 per cent, offset by better fleet car sales, following a 7.1 per cent dive in December. The SMMT forecast that new car sales in 2005 would slump, hitting 2.48 million against 2.57 million last year.
To soften the blow, Reg Vardy said it had performed "a little ahead" of the SMMT's figures and had experienced good used-car demand. It reiterated that its most important month of the year in terms of annual profitability, March, was still to come. Its bottom line will be further boosted by extra profits relating to property disposals during the rest of this financial year, it added. Dresdner Kleinwort Wasserstein is forecasting pre-tax profits after goodwill, but before property profits, of pounds 36.5m in the year to April.
Reg Vardy has almost 100 dealerships across the UK and sells most of the major brands including the specialist marques Aston Martin, Jaguar and Land Rover. It has a contract-hire division that leases cars to companies on 36-month deals.
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