Peugeot owner in talks to buy Vauxhall and Opel brands introduces first dividend in six years

The company's CFO said that all the cash that it has equips it to make "profitable investments in the interest of our shareholders"

The French group and Detroit-based GM confirmed on 14 February they were in talks over a PSA-Opel tie-up to create Europe's second-largest carmaker by sales after Volkswagen

PSA Group, the French carmaker in talks to buy Opel and Vauxhall from General Motors, announced its first dividend in six years and raised its medium-term profitability goal on Thursday after full-year profit almost doubled.

The Paris-based maker of Peugeot and Citroen cars said stronger pricing, sales of higher-specification models and cost cuts lifted the automotive operating margin to a record 6 per cent last year from 5 per cent in 2015.

The group raised its automotive margin goal to an average 4.5 per cent for the 2016-18 period while declining to comment in detail on its continuing Opel and Vauxhall takeover talks with GM.

PSA's €6.8bn in net cash equips the company to make "profitable investments in the interest of our shareholders", Chief Financial Officer Jean-Baptiste de Chatillon told reporters on a call.

But he added: "At this stage there can be no certainty as to the outcome of these talks."

The French group and Detroit-based GM confirmed on 14 February they were in talks over a PSA-Opel tie-up to create Europe's second-largest carmaker by sales after Volkswagen.

PSA expects the deal to lead to combined sales of 5 million vehicles in 2020-22 and savings between €1.5bn and €2bn, sources told Reuters on Wednesday.

Net income rose 92 per cent to €1.73bn last year, PSA said. Recurring operating income rose 18 per cent to €3.235bn on €54bn in revenue, down 1.1 per cent.

That beat expectations of €3.14bn in recurring operating income and €53.7bn in revenue, based on the median estimates in an Inquiry Financial poll of 13 analysts.

Reuters