Lex shares tumble as results disappoint

SHARES in Lex Service, the car dealer and fleet hire company, fell 30p to 447p yesterday after worse-than-expected results, writes Robert Cole.

Underlying profits growth was 18 per cent in the half- year to 26 June but profit margins were disappointing for new and used cars.

The interim dividend was increased 19 per cent from 4.7p to 5.6p.

Lex's pre-tax profits were pounds 29.7m against pounds 81.6m, including cash received from disposals, on turnover of pounds 1.2bn.

The company sold its stake in Arrow, the US electronics distributor, in May last year for pounds 60m.

David Leibling, chief executive, said he expected 20 per cent growth in new car sales next year, and thought next month would see a record number of cars sold.

'Orders for August . . . are significantly higher than last year, particularly from fleet purchasers,' he said.

Lex saw strong growth in its leasing business, jointly owned with Lombard North Central, as the number of cars and vans in the fleet increased 18 per cent to 59,000 at the end of June. Profits grew 70 per cent to pounds 13m.