EMH bucks car sales trend
Car dealership European Motor Holdings (EMH) outperformed the market in the first half despite a sluggish demand for new cars from cash strapped consumers.
EMH said the number of new cars sold at its franchises increased marginally over the period despite a 6 per cent fall in the registrations of new cars in Britain during the first eight months of the year. It added that it had “record profits” in September.
The dealership said performance, which was ahead of analyst expectations, vindicated its policy of concentrating on a small number of premium franchises.
In July, the company acquired the SKF dealership for £30.5m. The business comprises 18 branches in the north west of England and EMH chief executive Richard Palmer said the acquisition would fuel future growth. “There are significant benefits to come from our acquisition of SKF and our franchise portfolio continues to outperform the market,” said Palmer.
EMH operates 56 dealerships in Britain under brands such as Culvers, James Edwards and Malton Motors selling new and used cars. The firm made a profit before exceptionals and tax of £8.1m. The dealership bore an exceptional charge of £952,000 relating to the closure costs associated with two MG Rover franchises.
Numis analyst Mike Allen said margins at the motor retail arm fell back from 3.4 per cent to 2.9 per cent but that was still above the industry average. “The company remains confident that the premium sector will continue to take market share from the volume sector,” said Allen. “We believe there remains scope for the group to make further bolt-on acquisitions.”