Fleet News

Expansion plans keep Lex in frame for RAC

LEX Service has amassed a cash war chest of more than £100million and is looking to expand, prompting continued speculation that it remains in the frame to acquire RAC Motoring Services. Speaking at the company's annual meeting, Lex Service chairman Sir Trevor Chinn said: 'The group's financial position remains strong.

'As a result, we now have a total of approximately £100million net cash resources. With the backing of our financial capacity, our cash generation and the strength of our management, we are actively seeking opportunities to continue to build Lex.'

Away from expansion plans, Sir Trevor said used car prices had improved this year following about a year of widespread concern in the fleet, rental and leasing industry at tumbling residual values. But he warned: 'We are still making disposal losses in Lex Vehicle Leasing (compared with profits in the first half of last year). They are lower than in the last quarter of 1998.'

And Sanderson Bramall Motor Group chairman Tony Bramall supported Sir Trevor's view of a residuals improvement. He said first-quarter trading was well ahead of last year and added: 'We believe a policy of tight used vehicle stock control is vital to the rest of the year. While prices of used vehicles remain firm at the moment, we do expect the normal seasonal decline in the second half of the year.'

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