Arriva looks to 'selected expansion'

ARRIVA has confirmed its future as a leading motor retailer and rental operator following a substantial company re-positioning in the first half of this year which culminated in the sale of its contract hire business. Following the July sale of Arriva Automotive Solutions for more than £520million, Arriva is focusing on the expansion of passenger transport in both the UK and mainland Europe. This largely involves bus operations, although June signalled its first move into rail with a joint venture in Holland.

But in announcing interim results for the first six months of this year, the company underlined its commitment to motor retailing - it has 39 franchises representing 15 manufacturers - and daily rental which sees it operate a fleet of 8,000 cars and commercial vehicles from 57 dealership sites and dedicated rental outlets.

Half-year pre-tax profits are up 8% to £51.6million on turn-over up from £822million to £833.8million. Dealerships reported a £319million turn-over, down from £402 million in the first half of last year due to a change in the timing of deliveries to major fleet operators. Operating profit was £9.6 million (1998: £10.1 million) reflecting, according to a company spokesman, the 'very thin margin business represented by large fleet orders'.

The spokesman said Arriva was looking at 'selected expansion' of its franchise network and this year would be investing £14million in its network, mainly the redevelopment of a number of sites.