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Reg Vardy flexes buying power, adds more Jaguar/Land Rover franchises

Dealer group Reg Vardy plc has provided the following update on current trading at its Annual General Meeting. The Group reports it has has made a good start to the financial year and is continuing its expansion by acquisition.

Vardy says the September market has been strong although the final week of this month is crucial in terms of total registrations. An overall new vehicle market similar to last year is expected for the calendar year of around 2.5m registrations. The buoyancy in the new vehicle market is also fuelling a very strong used vehicle market, as change cycles are accelerated to cater for the new vehicle volumes which the manufacturers are distributing to retail and fleet customers in the United Kingdom.

”In certain franchises, says the Vardy plc statement, “new vehicle prices in the UK are now amongst the cheapest in Europe due to beneficial currency movements and market oversupply. Consequently, the Board believes the Group will benefit from these trends continuing in the market place as manufacturers seek to take advantage of our scale and retailing ability. In these circumstances, the Group is able to purchase large volumes of vehicles at significant discounts on a regular basis. As a result, the consumer is benefiting from highly competitive pricing and attractive financing offers.

”Within a week the new Block Exemption Regulations come into full effect across Europe. All our key manufacturer partners have now issued new contracts which come into effect on 1 October 2003. The Board believes the new contracts will have a positive impact on the Group's ability to deliver value from its operations and to acquire new businesses. The Group's strategy remains that we will work with our key manufacturer partners to grow and expand our UK market share in the long term.”

Vardy also announced the agreed acquisition of four dealerships for approximately £9m in cash, taking the total number of dealerships held by the Group to 82 and making further progress towards its goal of achieving 100 dealerships by April 2005. The Group has agreed Heads of Terms with Dutton-Forshaw to purchase, on 1 October 2003, the trade and assets of that group's Jaguar and Land Rover businesses in the North East of England. These businesses comprise four dealerships, with Jaguar in Newcastle upon Tyne and Land Rover in Newcastle upon Tyne, Durham and Stockton. The Group already has existing Jaguar operations in the region in Stockton and Houghton le Spring and the acquisition completes the market area in the North East of England for the two franchises. These developments follow on from acquisitions with Jaguar and Land Rover in Scotland earlier in the year and brings the number of Jaguar and Land Rover dealerships held by the Group to six and eight respectively. Vardy envisages that this will represent around 7% of the marques' new vehicle volumes in the UK.

Vardy intends to announce its interim results for the six months ended 31 October 2003 on Wednesday 10 December 2003.

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