Article Abstract:
BCH Group manages a leased car fleet and aims to move into direct sales by launching Cars Direct. The launch will be funded by a stock flotation, and HSBC will reduce its stake in BCH to 10% from 45%. The company aims to increase its operating margins from 6.4% through Cars Direct, and plans to put 60% of its car fleet through the new venture. This will increase the residual value of the vehicles sold after the expiry of their lease term. The company is likely to be valued at between 35 million pounds sterling and 40 million pounds from the issue price.
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Article Abstract:
Inchcape looks set to leave the FT-SE 100 as National Grid enters the index following its flotation in Dec 1995. Inchcape has seen a drop in its share price and has faced sluggish car sales. The company is likely to see a drop in new car registrations of 30% in Hong Kong in 1995. Imports of Japanese cars into the UK were affected by the high value of the Japanese yen in 1st half 1995. Overheads have been reduced and employees have been shed, but the chief executive, Charles Mackay, may be in a precarious position.
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Reg Vardy, the North-East-based motor dealer has more than doubled its earnings per share over the past four years, and has announced 42% earnings growth for the first half of 1998/99. Vardy has prospered by making clever acquisitions and much of its growth has been bought in, meaning that borrowings have risen, although they are still only 60% of shareholders' funds. However its unusual amounts of pricing power for the motor trade will be further enhanced when distributors are fewer.
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