Perry Group is the latest motor retailer to warn investors its profits for the financial year could fall short of expections.
It has been forced into restructuring because of the difficulties. The group has announced the sale of Perry Contract Hire to First National Vehicle Contracts for £1.3m. John Woollatt, Perry Group chief executive, said: "The disposal of PCH generates funds to to expand our Nationwide motor accident repair business. This reinforces its position as the pre-eminent independent accident repairer in the UK."
In its interim report, Perry said it was difficult to predict the likely performance of its franchised dealerships in the second half because of continuing customer confusion over prices.
The used car market had deteriorated further and the profitability of that sector and new cars had been adversely affected. First National Vehicle Contracts has acquired the contract hire portfolio of Perry Contract Hire Limited, a subsidiary of Perry Group, for approximately œ1.3m. The move to sell off the contract hire division was made to reduce the consolidated net debt of Perry Group. PCH also maintains vehicles owned by Motability Finance Limited and this business, which is only a minor part of PCH, will be retained. John Woollatt, chief executive of Perry Group, said: "The disposal of PCH generates funds to expand our Nationwide motor accident repair business, reinforcing its position as the pre-eminent independent accident repairer in the UK."