Fleet News

Dealer group profits hit by 'industry problems'

EUROPEAN Motor Holdings has blamed a slump in half-year pre-tax profits on a string of problems facing the motor industry. The company, which has a 32-strong multi-marque dealership network including BMW, Jaguar and Mercedes-Benz, saw its share price drop 10p to 54.5p after warning that full-year profits would fall short of expectations.

EMH this week reported a fall in pre-tax profits to £5 million (1997: £6.2 million) for the six months to September 30 on turnover which fell to £233.8 million (1997: £241.1 million). Earnings fell to 6.4p a share (1997: 7.9p). The interim dividend is held at 2.6p a share.

Richard Palmer, EMH's chief executive, said falling consumer confidence and high interest rates were hitting the industry, but claimed that the soon-to-be-introduced twice-yearly vehicle registration system and manufacturer policies were also impacting on margins.

He said: 'The lack of confidence in the market means some customers have deferred their next car purchase, particularly because the change from an annual registration plate system to a bi-annual system from the next calendar year means they only need wait until next March to buy a vehicle with a T registration. Plus there is an over-supply in the UK of new cars, which has had a damaging effect on used car prices. This damage will continue as long as some volume manufacturers encourage their dealers to pre-register cars.'

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