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Caverdale's profits nearly doubled in first half

Robert Cole
Monday 01 August 1994 23:02 BST
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CAVERDALE, the motor dealer which has Sir James Goldsmith and Kerry Packer among its shareholders, marked the first day of the new car registration year with a 93 per cent profits improvement, writes Robert Cole.

Pre-tax profits rose from pounds 663,000 to pounds 1.28m in the six months to 30 June, although much of the advance was achieved through acquisitions. Earnings per share grew by a more modest 20 per cent to 1.55p.

Caverdale has bought the motor dealerships of Godfrey Davis for pounds 4m since the end of the half-year period. With its three Ford dealerships, Caverdale now has 20 outlets selling 14 different makes.

Profit margins were reduced, however. The company admitted that customers had applied keen price pressure but said the margin erosion was mostly due to a change in the mix of the business.

Caverdale is selling more new cars, an activity which is less profitable in relation to turnover than selling or servicing used cars.

The Godfrey Davis business may squeeze margins further because 20 per cent of its sales are generated by selling to company car fleet operators.

Caverdale plans to pay an interim dividend of 0.1p, the first payment since a new management team was introduced in 1991.

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