Fleet News

Lex profits drop as RV crisis deepens

THE scale of the collapse in residual values has been revealed by Lex Vehicle Leasing, Britain's biggest contract hire company, which saw disposal losses rocket 460% to £14 million last year. Losses caused by falls in used car prices saw parent group Lex Service record annual profits for the year to the end of December down almost £10 million to £64.1 million (1998: £73.3 million) on turnover down from £1.7 billion to £1.53 billion for the same period.

In 1998, when the warning bells were beginning to sound on RVs, LVL lost £0.3 million on disposal, a fraction of the amount lost last year. Lex was hit by residual value falls of 5% in 1998 and 7% last year and has now increased prices to reflect lower used car values in future. Jon Walden, managing director of LVL, stressed that the company's continued adherence to service and management good sense would see it through the difficult trading conditions.

Overall, Lex Service results were helped by faster than expected progress at RAC Motoring Services, which contributed £10.2 million in the period from July when Lex took control, compared with an operating profit of £8.7 million for the whole of 1998.

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