Dealerships in Chelsea and Tadworth are to be closed as the group undertakes a major cost reduction programme.
The loss included, for the first time, a goodwill impairment charge of £4.1 million. The operating result before goodwill impairment was a loss of £0.7 million (2004: a profit of £4.3 million).
The results were announced in a statement by the group’s chairman, John P MacArthur this morning. He blamed a subdued UK economy, a poor UK new car sales market and high running costs in the South East for the drop in profits.
Loss after tax was £6.1m (2004: a profit of £1.7m) representing a loss per share of 25.8p (2004: earnings of 7.3p). The directors have decided that it would ‘not be appropriate’ to declare an interim dividend.
Turnover was down by £2m to £346m from £348m in the first six months of 2004.
Expenditure on acquisitions was £0.9m and net capital expenditure amounted to £1.5m during the period. Overall there was a cash inflow of £2.1m and an increase in net debt to £23.6m.
MacArthur said he expected the new car sales market to continue to decline for the remainder of the year and market conditions would continue to be ‘extremely challenging’. The group also predicts a loss for the second half of the year.