Profits halved at Perry Group

HALF-YEAR pre-tax profits at Perry Group, a leading Ford main dealer with a bias to the South-east, halved from pounds 1.1m to pounds 553,000.

The interim dividend has been held at 2.75p although the payment was not covered by earnings in the six months to 30 June.

Following the results Perry shares fell by 8p to 113p, which compares with a published net asset value of 225p a share.

Richard Allan, chairman, said he was hopeful that trading conditions would not deteriorate further in the second half of the year.

He warned that without an upturn in the economy it would be unrealistic to expect an improvement in the company's fortunes.

Mr Allan said that although the key August market for cars was of a similar size to last year's, Perry dealerships were reporting improved results.

Operating profits were 16 per cent lower at pounds 2.14m after a 3 per cent cut in administration expenses. But a rise in Perry's already high bill for bank interest and finance leases from pounds 1.46m to pounds 1.59m cut pre-tax profits in half.

Gearing was 39 per cent at the end of June and Perry is cutting capital spending from pounds 900,000 to less than pounds 500,000 in the second half.

New car sales fell by 1 per cent to 8,226 but cost-cutting turned a pounds 287,000 loss into a pounds 304,000 profit. Wage costs were 5 per cent lower overall and there was a similar fall in the head count.

Used car sales fared worse, retreating by 5 per cent, and profits fell by 26 per cent to pounds 1.13m. Losses on trucks increased from pounds 164,000 to pounds 221,000.

Perry's extensive auto parts division showed unchanged profits of pounds 1.9m but servicing profits slipped by 4 per cent to pounds 1.98m and body shops were 10 per cent lower at pounds 1.32m.

Smith New Court, broker to the company, is forecasting full-year profits of pounds 1.7m against pounds 2.23m, which assumes that Perry will be able to report more than pounds 400,000 profit on property sales.