Henlys slashes loss despite bid defence: Improvement seen in new car market

HENLYS, the motor dealer and coach builder that last summer fought off a hostile bid from the rival car group T Cowie, reduced pre-tax losses from pounds 6.8m to pounds 850,000 in 1992.

Robert Wood, chief executive, said the successful defence had cost pounds 950,000, which was taken as an extraordinary charge.

As forecast during the bid, Henlys' troubled coach operation, Plaxton, broke even during the second half. Restructuring charges fell and borrowings were reduced by pounds 4m to pounds 26.4m.

Mr Wood said: 'We view the future with optimism, with benefits flowing from cost reductions, improved efficiency and an improving trend in the new car market.'

The coach and bus division, the focus of much of T Cowie's criticism during an acrimonious bid, reduced its operating loss from pounds 3m to pounds 2m. Included in that was a pounds 1m charge for consultancy fees to improve productivity. Costs in the division have been reduced by pounds 5m a year.

The market for coaches and buses remains tough, with industry forecasts predicting only a modest recovery over the next three years. Mr Wood said, however, that Henlys had secured a 50 per cent share of the market for mid-sized buses.

Profits from the 24 car dealerships recovered some of 1991's lost ground, with operating profits of pounds 5.8m, compared with pounds 3.5m and pounds 6.6m in 1990. Most of the improvement came from after-sales work, parts and servicing, which accounts for two thirds of the division's profits.

Henlys hopes to double the number of its dealerships over the next few years and is concentrating its efforts on multi-franchise sites.

The loss per share was cut from 16.7p to 3.3p. Despite being uncovered, a final dividend of 2p makes a maintained total for the year of 3p. The shares were unchanged at 115p.

T Cowie retains a 10 per cent stake but is prohibited, under takeover panel rules, from re-bidding until October.