Cowie rides buses to a record finish

BY RUSSELL HOTTEN

Strong growth in Cowie's bus operations helped the UK's largest independent motor dealer to report record annual profits, up 26 per cent to £43.6m.

Sir James McKinnon, chairman, said Cowie's motor finance, retailing, bus, coach, and distribution businesses, and contracted income portfolio would continue to perform strongly.

He urged the City to judge Cowie's diverse operations on performance, not in comparison with its rivals.

"Cowie should be assessed not on the performance and prospects of others in the motor sector, whose areas of operation are perhaps more limited, but according to its own record of profit improvement, and its potential - both of which are excellent," he said.

Analysts said the results for the year to 31 December were better than expected. Profit forecasts had been around £41m. Cowie shares rose 5p to 232p.

Profits from bus operations more than doubled to £3.4m, and turnover rose by £27m. Grey-Green, Cowie's established operator for 15 years, increased profits to £2.2m. The firm has bought two of the 10 privatised London bus companies - Leaside and South London Transport - becoming the capital's largest operator with more than 1,000 vehicles. Costcutting at both operations is underway, and profit margins are improving, Cowie said.

Cowie Interleasing, which largely comprises the finance division, made a 17 per cent improvement in profits to £27.8m. Gordon Hodgson, chief executive, said: "Our greatest strength is manifest in our substantial, sustainable and secure long-term, contracted future income from our vehicle finance operations.''

Borrowings, at £339m, were £51.2m higher than at the end of 1993. However, gearing has fallen from 212 per cent to 187 per cent following receipt last month of money from a £34m rights issue.

A final dividend of 6.4p makes a total of 9.125p, a rise of 16 per cent.