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HR Owen interim results

HR Owen has reported a £6.1 million loss in profits after tax in the first six months of this year.

Turnover was £118m compared to £129m for the first half of 2005.

The dealer group said the results reflected the ‘continuing impact of the significant reorganisation that the board announced last year and many of the volume-related franchises produced mixed results prior to their disposal’.

Proceeds received from the disposal of certain businesses were £14.3m and capital expenditure was £2.2 million. Overall there was a cash inflow of £16.1m and a reduction in net debt to £5m.

The directors are not recommending the payment of an interim share dividend.

#AM_ART_SPLIT# HR Owen has been engaged in a number of disposals of dealerships in the first part of the year.

Six Volkswagen franchises, with outlets in north London and Berkshire, were sold in a management buy-out in February. Six PAG franchises were sold in East Anglia to Lookers Southern and in a third transaction one Audi franchise was sold to the Wayside Group in June.

The group also closed four franchises in north and west London for Jaguar, BMW (two) and Mini. It also intends to dispose of a further four properties, three leases and one freehold, which are now subject to detailed negotiations.

HR Owen's three remaining Audi dealerships were sold to a management buy-out team in July and 10 dealerships (Mercedes-Benz/Smart, Chrysler/Jeep, Lexus and Land Rover franchises) to Lookers Southern, in August. At the end of September, the group will close the Volvo City and London South dealership as a result of a compulsory purchase order and will consolidate this franchise in the group's other existing Volvo dealerships in central and north London.

Additionally, on September 21 Nicholas Lancaster, HR Owen chief executive, informed the board that he was considering making a proposal, which may or may not lead to an offer for HR Owen. There have been no more developments with this announcement, although, the board said that when a proposal is made it would distribute any surplus funds to shareholders.

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