|
The motor retail group HR Owen has been approached by an unnamed
party in relation to a possible takeover bid. It said discussions
are at an early stage and a spokesperson for the prestige retailer
declined to name the other party or to provide any further
details.
The takeover news came as the group released its results for the
first half of 2007, showing increased turnover and profits for the
period year on year, and has announced that it is to sell off its
BMW/MINI and Volvo dealerships, as part of a strategy to focus on
specialist high-end brands.
Profit from continuing operations was “substantially ahead of
last year”, said chairman John MacArthur, at £1.9m for the six
months to June 30 2007 compared with just £0.2m in the same period
in 2006. “Strong growth in the group’s core Specialist division”
was the main driver behind turnover growth of £19.4m, 32.6 per
cent, from £59.5m in H1 2006 to £78.9m in H1 2007, MacArthur said.
The Specialist division comprises dealerships for Alfa Romeo,
Bentley, Bugatti, Ferrari, Lamborghini, Maserati and
Rolls-Royce.
The news was less rosy in the group’s volume brand
operations, which made an unspecified loss over the period,
although the size of the loss was smaller than in the same period
last year, MacArthur said.
Adjusting for discontinued operations and exceptional
charges, HR Owen made after-tax profits from continuing operations
of £1.2m.
The retailer completed a capital reduction programme in April
2007 which saw £11.8m returned to shareholders. HR Owen managed to
wipe out its net debt balance, which at June 30 2006 stood at £5m,
and finished H1 2007 with cash balances of £5.7m.
BMW, MINI and Volvo to go
With the agreement of the relevant manufacturers secured, HR Owen
has announced that it is to dispose of its BMW, MINI and Volvo
retail outlets, with completion of the sales expected later in
2007. The group operates two Volvo dealerships, both located in
London, and three BMW/MINI outlets.
The performance of the company’s BMW and MINI outlets
improved over the period in question and were the “best for a
number of years”, helped by “excellent new model introductions”,
MacArthur said, although only two of the three delivered H1 results
in the black.
He was less forthcoming on the performance of the company’s
Volvo dealerships, saying only that they “held their position in an
extremely competitive market sector”.
Specialist brands’ demand waxing
On a more positive note, demand for luxury cars in HR Owen’s core
London and south-eastern market has been extremely strong, powered
in no small part by record bonuses for City workers. HR Owen has a
strong order book for many of its Specialist division brands: the
next two years’ allocations of Rolls-Royce Phantom Drophead Coupé
have already been pre-sold, substantial forward sales for Ferrari,
Bugatti and Maserati, and an “encouraging” order book for new
models of Alfa Romeo.
The company’s prospects look positive, MacArthur said, with a
new Ferrari/Maserati aftersales unit planned in north London, and a
new Bugatti showroom to open in Stockport.
MacArthur concluded: “We are now being offered good
opportunities to expand with our chosen specialist brands, which we
will evaluate in conjunction with maintaining our low gearing for
the industry.
“The board feels confident that its recent strategy of
downsizing to a smaller and fitter operation has greatly improved
the prospects for the group. This, when combined with the
group’s significant resources and excellent brands, should enhance
future returns for shareholders.”
HR Owen expects to return a dividend to investors when the
full-year results are announced.
|
