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Trevor Finn: Ryland deal proves too good to miss

Trevor Finn delights in being a shrewd operator. While he was telling analysts at Pendragon's interim results that the dealer group had no plans for any large-scale acquisitions in the UK, behind the scenes he was negotiating with Guinness Peat Group to acquire 29.99 per cent of its 30.01 per cent stake in Ryland.

The £11.5m deal - valuing the shares at 130p each - took analysts by surprise, but for Pendragon's chief executive it was a case of an opportunity too good to pass up. It was prompted by Guinness Peat's original 120p per share bid for Ryland, which was rejected by directors. Ryland's management team, headed by chairman and chief executive Peter Whale, then made an alternative indicative approach, which has since been dropped following Pendragon's action.

Finn is now engaged in talks with Ryland management to discuss how the two groups should develop and exploit their new relationship.

Meanwhile Pendragon, which reported a 17 per cent increase in pre-tax profits to £15.5m for the first half of the year, on turnover up 14 per cent to £998m, has announced plans to offload some of its poor performing dealerships to fund more share buy-backs.

Finn wants to sell property worth £13.4m, returning surplus profits to shareholders, and says the buyback programme will boost earnings per share for the full year to six per cent.

He is looking to expand the group in the US, but says the performance of the German dealerships is “disappointing”.

“A lot of hard work is under way in the USA to provide a base from which to expand in the near term,” says Finn. In Germany, a poor economy had been made worse by “manufacturers' failure to take positive action to maintain the position of the brands we represent”.

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