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EMH results ‘excellent’ in tough trading conditions

European Motor Holdings has reported a pre-tax profit exceptional items for the six months to August, 2005 of £8.1m compared with £8.5m over the same period last year.

This year's results include exceptional losses of just under £1 million made in the former MG Rover dealerships.

Chief executive Richard Palmer described it as 'an excellent performance' in challenging conditions and promised that there are significant benefits yet to come from the acquisition of Smith Knight & Fay Group.

In the prior period there were exceptional profits of £13.4m, relating to the VAT refund and associated interest.

Chief executive Richard Palmer said: "Our results represent an excellent performance in challenging conditions. There are significant benefits to come from our acquisition of SKF and our franchise portfolio continues to outperform the market.

"Our September performance has been very strong with record profits for any month in the history of EMH. We look forward to a satisfactory conclusion to the financial year."

An exceptional charge in the period of £952,000 was made relating to the closure costs and losses from the two MG Rover franchises EMH held at the time of the manufacturer's collapse earlier this year. In the prior period there were exceptional profits of £13.4 million, relating mainly to a VAT refund and associated interest.

The company said that while in the first eight months of the calendar year registrations of new cars in the UK were 6% lower than the previous year, registrations for EMH’s franchises increased ‘marginally’, outperforming the market, and "once again vindicating our declared policy of concentrating on a small number of premium franchises".

"These figures demonstrate, as we have stated in the past, that a significant feature of the UK market in recent years has been the migration from 'volume' cars to the premium sector."

On July 1, 2005 EMH acquired the SKF group in the North West for £30.5 million. The SKF group comprises 18 dealerships, two bodyshops and a pre-delivery inspection centre. EMH gained eight more Volkswagen car businesses with the acquisition and now holds every Volkswagen car franchise for the Greater Manchester area plus the Volkswagen light commercial vehicle franchise for Manchester.

EMH also gained Audi franchises in Bolton, Macclesfield and Stockport as a result of the acquisition and the Chester Audi business which EMH sold to SKF last October also rejoined the group.

EMH’s motor retail division's profit before interest and tax for the period under review rose from £9.2 million to £9.5 million including a £0.2 million contribution from the newly acquired SKF businesses in July and August. Revenue in the period for the division rose by 21%.

Wilcomatic, the principal operating subsidiary of the motor services division, had an ‘excellent’ first half year with profit before tax rising by 39% to £0.8 million.

On the outlook for the rest of the year Palmer said: "UK vehicle registrations for the month of September 2005 were 3% lower than last year. However, registrations for the franchises we represent grew by 5%. The rising market share for our brands and the contribution from our newly acquired businesses ensured a record profit for any month in the history of EMH.

"We expect that our performance in the second half will show continued growth and look forward to another satisfactory full year performance."

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