HR Owen has reported ‘significant falls’ in profits over the past 2 months, as the dealer group issues a profits warning.
‘Every marque represented by the group’ has been affected, said a trading update.
This means it will record a loss in the second half of the year. However, the group is expected to post a break-even full-year result.
Hopes have been dashed for a return to profit in 2009, too.
‘The current uncertainties in the automotive retail sector make predictions for next
year very difficult. However, the Board’s expectation is that trading throughout 2009
will remain severely depressed.’
A lack of affordable credit is blamed, giving a ‘serious obstacle to the completion of vehicle sale transactions’. Customers are also delaying purchasing decision.
HR Owen says the VAT reduction has not yet had any noticeable effect.
One bright spot is aftersales volumes and margins. These remain healthy, and have not deteriorated over the past 2 months.
Low used car inventories have also been maintained, thanks to the group ‘applying stringent controls to ensure that used stock values remain in line with current market valuations’.
A recent sales initiative boosted used car volumes, too.
Despite the poor results, HR Owen will retain its current dividend policy, and is expected to recommend a payout to shareholders.
