As AM went to press, stocks of many quoted dealers were hitting new highs. CD Bramall, Caffyns, European Motor Holdings, HR Owen, Inchcape, Lookers, Pendragon and Reg Vardy were all enjoying substantial share gains, and some were achieving remarkable peaks.
Although interest in the sector has been boosted by takeover speculation, analysts say motor dealers in general are becoming more attractive to investors because of post-block exemption growth opportunities.
“Financial institutions are finally understanding what block exemption's all about,” says Alan Pulham, director of the Retail Motor Industry Federation's Franchised Dealer Division. “The major groups have worked hard to explain the advantages to them, like improved security of tenure for dealers and the freedom to sell their businesses. These high share prices also come off the back of a series of excellent results for companies like Reg Vardy.”
Inchcape best illustrates the new-found confidence. As its stocks smashed through the £10 barrier for the first time in 2003 it announced it was to acquire two flagship BMW dealerships from William Jacks in Cobham, Surrey and Wimbledon, south London. The share price was further inflated by rumours that Inchcape may be preparing to mount a bid for Caffyns.
A spokeswoman for Inchcape says: “The City is finally rewarding us for what we have been doing – consolidating our businesses, improving efficiency and expanding territories.”