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EMH on acquisition trail with £36m fund

European Motor Holdings has a £36.6m cash reserve ready for dealer acquisitions this year.

Industry observers believe its likely target will be more Audi, Bentley or Lexus businesses as these would fit in with its prestige franchise portfolio. In March, EMH expanded its Bentley representation by adding the Michael Powles showrooms in Leicester and Norwich to the Newcastle outlet it has operated since March 2004.

The AM100 dealer group has announced record results for the year to February 28, 2005 showing a £40m increase in turnover to £528m and a £6.8m increase in operating profits to £20.3m. Total pre-tax profit was £30.1m, which includes a £6.3m VAT refund plus £6.3m interest.

Chief executive Richard Palmer says: “The group remains extremely well placed to expand while retaining low borrowing levels.”

Palmer highlights the “excellent performance” of the group’s BMW and Mini businesses, which achieved sales growth or 8% and 11% respectively and increased aftersales profits. He expects further growth this year with the introduction of the new BMW 3-series, revised 7-series, M5 and M6. The company expects its fifth dual BMW and Mini site to open in Durham this July.

EMH’s Premier Automotive Group businesses had “mixed” results – its Jaguar dealers registered 31% more vehicles and Volvo registrations grew by 6% but Land Rover sales remained flat. Its Volkswagen dealerships had a tough year too, although Audi achieved 12% growth in registrations. Following the collapse of MG Rover, EMH plans to close its two MGR dealerships in Sunderland and Chester.

Palmer says: “Our strategy of concentrating on a small number of premium and specialist brands has continued to differentiate our performance from that of our peer group. While certain sectors of the market appear to have suffered, our results have been protected by our strong portfolio and balanced geographical spread.”

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