RNS No 5974a
DAGENHAM MOTORS GROUP PLC
8th September 1998
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 1998
Dagenham Motors Group plc, the UK's largest dedicated Ford
dealership group, announces record interim results for the
six months ended 30 June 1998.
KEY POINTS
1998 1997 Change
Turnover (#'m) 162.00 145.23 +11.6%
Profit before tax (#'m) 3.04 2.83 +7.4%
Earnings per share(p) 9.8 8.0 +22.5%
Dividend per share(p) 2.75 2.5 +10.0%
* New Ford car sales increased 27% to 7,047 vehicles
* Used car sales increased 6% to 4,553 vehicles
* Accident repair profits up 50%
* Three new Ford car dealerships opened during the
period - Plaistow, Cobham and Kingston. Additional
Iveco Ford commercial vehicle dealership opened at Chelmsford
* Gearing reduced from 51% to 49% despite share
buy-back - interest cover remained very comfortable at
4.1 times
Commenting on the outlook David Philip, Chairman, said:
"The second half of the year has started well with new car
sales remaining substantially ahead of last year in the all
important month of August.....The Directors remain quietly
confident of another satisfactory result for the year".
Enquiries:
David Philip, Chairman on
0171 466 5000 until 1.00 p.m., thereafter 0181 592 6655
Richard Oldworth, Richard Darby,
Buchanan Communications on 0171 466 5000
CHAIRMAN'S STATEMENT
I am very pleased to report a record profit of #3.039 million
for the first half of 1998 (1997: #2.83m). Turnover for the
period rose by 11.6% to #162 million (1997: #145m) mainly due
to a substantial increase in the group's new car sales.
Earnings per share rose by 22.5% to 9.8 pence per share
(1997: 8.0p).
DIVIDEND
The Directors are declaring an interim dividend of 2.75 pence
per share (1997: 2.5p) to be paid on 16 November 1998 to
shareholders on the register on 9 October 1998.
TRADING REVIEW
The group's sales of new Ford cars rose by 27% to 7,047
vehicles, reflecting the strong demand throughout the whole
period. This result was brought about through organic
growth - by management initiatives and by competitive pricing
in the market place of the steadily increasing range of fine
Ford products. The bulk of this increase went into the all
important retail sector of the market and underlined the
ever increasing appeal for Ford's much wider range of products
in this sector.
The extremely competitive new car offers caused a sharp
readjustment of used car values but, nevertheless, used car
sales from the group's dealerships increased by 6% to 4,553
vehicles and demand for used cars at the right price remained
strong.
The group's sales of new commercial vehicles remained at
1,356 units with reduced sales within the commercial vehicle
division being offset by increased sales of commercial vehicles
from the car division. Used commercial vehicle sales fell by
17.8% to 198 units, reflecting some deterioration in the
demand in this relatively small retail market.
The contribution from the accident repair division forged ahead
with a 25% increase in sales volume producing a 50% increase
in profit.
Sales in our service and parts division remained static and
there was a small reduction in overall contribution.
Profits from our commercial vehicle division have reduced from
the exceptional figures achieved in 1997, mainly as a result
of a lower demand and tougher trading conditions on new and
used vehicles. However, the improvements in the performance
from our car dealerships have more than offset this reduction.
During the period the group opened three new Ford
car dealerships in Plaistow, Cobham and Kingston, and an
additional Iveco Ford commercial vehicle dealership at
Chelmsford. These businesses extend the group's existing
franchised territories and demonstrate both Ford and Iveco
Ford's pledge to increase the size and profitability of
their preferred franchise partners.
The most encouraging aspect of the period under review is
that the main profit growth has come from our true core
business - new car sales.
Profits at Brownings Electric Company Ltd., reduced to
#132,000 (1997: #171,000) on a turnover of #1.66m
(1997: #1.60m) due to more competitive trading conditions.
Despite the buy-back of 1.025m of the Company's shares for
#1.33m group borrowing fell by #0.6m to #16.3m, which reduced
gearing from 51% at the end of 1997 to 49%. Interest cover
remained very comfortable at 4.1 times.
CURRENT TRADING AND OUTLOOK
The second half of the year has started well with new car
sales remaining substantially ahead of last year in the all
important month of August. Used car sales have also remained
strong and a reduced level of part exchanges during August has
left us with lower than usual used car stock levels. This
should leave the group well placed to trade in this sector
satisfactorily during the traditionally more difficult
autumn and winter months.
The new dealerships opened in the first half of the year
should start to contribute to profit during the second half
of the year. We are eagerly awaiting the introduction of
the already much acclaimed Focus, a high volume vehicle that
we feel will be one of the most, if not the most, significant
new models of the decade. This car will be introduced to
the European market at the Paris Motor Show later this month
and will be available in volume from our showrooms as early as
October. The Ford Cougar, another exciting car will also be
introduced shortly. The Ford product-led strategy to advance
into the more specialised and profitable retail sector is well
under way, and we have already seen improved margins on the
latest additions to the range, KA and Puma.
The Directors anticipate that the demand for commercial vehicles
will remain weaker in the second half of the year, but this
should be more than adequately compensated for by improvements
in our car operations, and therefore remain quietly confident
of another satisfactory result for the year.
The group is planning the acquisition of more dealerships
which will further reinforce its position as the largest
dedicated Ford dealer in the United Kingdom.
David Philip
Chairman
8 September 1998
DAGENHAM MOTORS GROUP PLC
Unaudited Results of the Group
Consolidated Profit and Loss Account for the
six months ended 30 June 1998
Six months Six months Year ended
30 June 1998 30 June 1997 31 Dec 1997
#'000 #'000 #'000
Turnover 162,006 145,226 297,629
====== ====== ======
Operating profit-
continuing operations 4,018 3,752 8,024
Interest payable and
similar charges (979) (921) (1,851)
______ ______ ______
Profit on ordinary
activities
before taxation 3,039 2,831 6,173
Tax on profit on
ordinary activities (1,003) (991) (2,095)
______ ______ ______
Profit on ordinary
activities after taxation 2,036 1,840 4,078
______ ______ ______
Dividends (544) (518) (1,823)
______ ______ ______
(Dividends pence per share) (2.75p) (2.5p) (8.75p)
Earnings per share 9.8p 8.0p 18.5p
DAGENHAM MOTORS GROUP PLC
Consolidated Balance Sheet at 30 June 1998
At At At
30 June 1998 30 June 1997 31 Dec 1997
#'000 #'000 #'000
Fixed Assets
Tangible assets 2 4,637 25,523 26,862
Investments 23 22 22
_______ _______ _______
24,660 25,545 26,884
_______ _______ _______
Current Assets
Stocks 35,821 33,608 35,472
Debtors 30,156 19,156 22,817
Cash at bank and in hand 46 35 356
_______ _______ _______
66,023 52,799 58,645
_______ _______ _______
Creditors: Amounts falling
due within one year (45,041) (35,544) (40,172)
_______ _______ _______
Net Current Assets 20,982 17,255 18,473
_______ _______ _______
Total Assets Less Current
Liabilities 45,642 42,800 45,357
Creditors: Amounts falling
due after more than one
year (12,181) (11,615) (12,077)
Provisions for liabilities
and charges (292) (328) (292)
_______ _______ _______
33,169 30,857 32,988
_______ _______ _______
Capital And Reserves
Called up share capital 1,978 2,218 2,078
Share premium account 13,881 13,859 13,862
Other reserves 8,516 6,714 9,259
Profit and loss account 8,794 8,066 7,789
_______ _______ _______
Equity shareholders' funds 33,169 30,857 32,998
_______ _______ _______
DAGENHAM MOTORS GROUP PLC
Consolidated Cash Flow Statement
for the six months ended 30 June 1998
Six months ended Six months ended Year ended
30 June 1998 30 June 1997 31 Dec 1997
#'000 #'000 #'000
Net cash inflow from
operating activities 5,656 8,588 11,570
Returns on investments
and servicing of finance
Interest paid (1,315) (921) (1,736)
Reconciliation to net debt
At At At
30 June 1998 30 June 1997 31 Dec. 1997
#'000 #'000 #'000
Increase/(decrease) in
cash for the year 261 4,523 3,291
Cash used/(utilised) to
increase/(decrease)
liquid resources 337 (354) 339
====== ====== ======
Change in net debt 598 4,169 3,630
_______ _______ _______
Net debt at beginning of
period (16,878) (20,122) (20,508)
_______ _______ _______
Net debt at end of period (16,280) (15,953) (16,878)
_______ _______ _______
NOTES:
1. The charge for taxation is based on the estimated
effective rate for the year as a whole.
2. The calculation of earnings per share is based on the
profit after taxation of #2,036,000 and on 20,718,222
shares, being the weighted average number of shares in
issue during the six months.
3. The interim accounts for the six months ended 30 June
1998 and the comparative figures for the six months
ended 30 June 1997 are unaudited. The figures shown
in respect of year ended 31 December 1997 constitute
abridged accounts under S255 of the Companies Act 1985.
Full accounts, including an unqualified auditors' report
were circulated to members in April 1998 and have been
filed with the Registrar of Companies.
4. An interim dividend of 2.75 pence per share will be paid
on 16 November 1998 to shareholders on the register on
9 October 1998.
5. Copies of the interim report will be despatched to
shareholders. Further copies may be obtained from the
Company's registered office Ford House, New Road,
Dagenham, RM9 6EX.
Taxation
UK corporation tax paid
(including advance
corporation tax) (130) (204) (1,901)
Capital expenditure
Payments to acquire
tangible fixed assets (1,127) (811) (1,656)
Receipts from sales of
tangible fixed assets 125 114 1,474
_______ _______ _______
(1,002) (697) (182)
Equity dividends paid (1,300) (1,275) (1,795)
_______ _______ _______
Cash inflow before
management of
liquid resources and
financing 1,909 5,491 5,956
Management of liquid resources and financing
Issue of share capital 22 22 25
Redemption of shares (1,333) (900) (2,160)
New medium term loans - 360 1,110
Repayment of loans (316) (402) (1,598)
Capital element of finance
lease payments (21) (48) (42)
_______ _______ _______
Net cash outflow from
financing (1,648) (968) (2,665)
_______ _______ _______
Increase in cash and
cash equivalents 261 4,523 3,291
_______ _______ _______
Reconciliation of
operating profit to net cash inflow from operating activities
Operating Profit 4,018 3,752 8,024
Depreciation charges 775 779 1,571
(Increase)/Decrease in
debtors (5,031) 3,331 (323)
Increase in Stocks (349) (2,288) (4,152)
Increase in Creditors 6,193 3,014 6,450
Loss on sale of fixed
assets 50 - -
_______ _______ _______
Net cash inflow from
operating activities 5,656 8,588 11,570
_______ _______ _______
END
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