Finance director David Jagger says the results reflect restructuring of the group's portfolio following the changes to the block exemption rules. It was also affected by delays to new specialist mod-els such as the Bentley Continental GT and Rolls-Royce Phantom, and a weak London economy.
“We had to write-off a chunk of goodwill which affected us because we were buying and selling businesses to get the portfolio in line with our strategy,” says Jagger. “We now have the franchises that we want. We might add the odd infill business, but there will be no large-scale acquisitions.”
Like for like turnover dipped from £489.78m to £458.35m at the group, whose 47 franchise outlets include Audi, BMW, Bentley, Ferrari, Land Rover, Jaguar, Mercedes-Benz, Volvo, VW Group.
In October HR Owen issued 4.437m new ordinary shares, which raised £6.7m. These funds will be used as working capital and to finance the growth and relocation programme – new outlets are due to open in Stockport (Lamborghini) in May and Park Royal in London (BMW) later this year, while the VW outlet in Hayes will move to Ruislip in 2005 and the Lexus Brighton showroom will move to new premises.
Analyst Edison Investment Research is upbeat about the changes made at HR Owen, forecasting pre-tax profits for 2004 of £5m on turnover of £700m.