The Investment Column: Salvesen should have accepted bid
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Does the stock market need another car dealer? As an industry, motor distributors suffer from wafer-thin margins, overcapacity and low growth prospects. Not to mention the grip exerted over their businesses by the car manufacturers. Most dealers have made appalling investments.
Sytner, founded and chaired by former racing driver Frank Sytner, is better than most. In the three years to December 1996 profits rocketed from pounds 480,000 to pounds 2.67m. A further rise to pounds 6.5m is forecast for 1997.
Much of the growth has come from acquisitions. But Sytner has also squeezed better sales out of the dealerships it takes over. It plans to use the pounds 16.9m float proceeds - a further pounds 6.2m will be shared between venture capitalists and directors - to expand and take on new marques like Jaguar.
There are pitfalls, however. Manufacturers will jealously limit the number of dealerships Sytner is allowed to take on. An environmentally inspired tax on gas guzzlers would also hurt Sytner more than most.
It may be one of the best car distributors around. But at 230p - a multiple of 11 times forecast earnings - the shares are not worth chasing.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments