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HR Owen profits slump in 2000

HR Owen chairman John MacArthur says the group has weathered the storm of 2000, which saw pre-tax profits cut by more than a half, and it is now prepared for increased profitability this year boosted by a return of customer confidence.

The dealer group's results, released this afternoon, show that in the 2000 financial year to December 31, 2000 turnover increased by 4%, to £497.6m (1999: £480.5m), including £20.7m from acquisitions during the period.

But pre-tax profit was £1.8m (£3.8m) a reduction of 53%. After-tax profits were down year-on-year from £2.6m to £1.2m.

Expenditure on acquisitions was £5.5m and net capital expenditure totalled £3.5m.

Mr MacArthur said: “Manufacturer consolidation has forced many brands to change hands in recent years with more mergers/acquisitions likely in the future. For retailers these changes have played havoc with territory and brand planning, further exacerbated by uncertainties over the outcome of the review of Block Exemption and the necessity for franchised territories to be rationalised.

“Consequently, a considerable amount of management time has been devoted to these processes. However, we believe all of these changes will have a positive impact on the group.”

Mr MacArthur also said that the group had anticipated the growth in parallel imports would be “short-lived”, but it had been disappointed by the length of time it took for manufacturers to revise their prices “and the market was lost for the year”.

2001, he said, had started with a “wave of optimism”.

“Current internal forecasts for the first quarter anticipate a return to a higher level of profitability, which will be boosted by strong new vehicle orders following the introduction of the 'Y' registration letter in March.”

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