Autologic profits dented by French problems
Shares in AutoLogic were driven lower today after the UK-based car transportation firm said weakness in the French car market had dented profits.
The stock lost 14% of its value as investors saw losses from its operations in France more than double to £2.4m (€3.6m) during the six months to June 30.
Fewer cars being marketed by Ford put a drag on profits in the UK, although AutoLogic said this was in line with expectations and had been partially offset by contract wins elsewhere.
Group profits for the first six months of 2004 were 9% lower than a year ago at £12.5m (€18.6m), while revenues were down 3% at £347.9m (€516.7m).
AutoLogic, which has its headquarters in London, generates the bulk of its revenues from transporting cars from factories to dealerships.
Additional services include workshops, storage compounds, inspections and valeting vehicles before they are displayed in showrooms.
More than 2,600 staff work for Ansa and Walon – its two chief brands in the UK - at locations including Hartlepool, Liverpool and Bristol.
The company employs a further 1,850 people in France, Spain and the Benelux countries, and it has recently signalled an intention to expand into eastern Europe by establishing a base in the Czech Republic.
Chairman John Merry said the business had made strides since January and benefited from new EU rules aimed at freeing up the car market.
Special exemptions that had allowed car makers to operate exclusive brand networks were scaled back in October, and head office was now able to work directly with dealerships.
Mr Merry said: “We are beginning to see progress in terms of new contract wins. We expect this area to show good growth over the coming years.”
The impact of fewer vehicle registrations in France on profits was made worse by dealerships opting to reduce the number of cars waiting to be sold. This led to a sharp decline in storage volumes.
Industry forecasts pointed to a further expansion of the car market in western Europe and trading in the first weeks of the second half was in line with hopes, Mr Merry said.
But he added: “As yet there is no sign of any sustainable and consistent upturn.”
