- Account gamble
Riding high
John Bull
I can start this week with further self-congratulation following the excellent reception given to the Averys results. The shares were well up on my recommended price. Good as my. record so far this year has been, however, there is no cause for complacency.
Now last week I noted the excellent profits returned by the car hire and distribution firm Godfrey Davis and it has managed a sixth successive year of profit growth — last time with a 50 per cent advance. Now soon coming up are figures from Mann Egerton. This group is also firmly entrenched in the motor industry which accounts for about 92 per cent of profits. It is one of the biggest BLMC dealers in the country and employs some 5,000 people.
What primarily attracts me to have a punt in Mann Egerton is the fact that the chairman, Mr R. W. B. Hawksley (motorists will be familiar with the hawk stickers on Mann Egerton cars) said that pre-tax profits for the first four months of the current year were ahead by 30 per cent. Mr Hawksley believes that there is a backlog of new car business to be done and is optimistic about prospects partly as a result of increased scrappage due to ' drop-out ' old bangers failing their MoT tests.
I feel that the market is taking an unusually gloomy view of Mann Egerton, partly because of the Phase 2 margin restrictions. Yet the figures speak for themselves and there is no doubt that BLMC sales are going well. Also there is added appeal of the probability of some development on the property front this year.
At 135p the shares are selling at only nine times last earnings. But this multiple drops several points on current prospects, and there seems little stopping the group in its seventy-fifth year from making record profits.
First Last Account dealing dealing day June 4 June 15 June 26 June 18 June 29 July 10 July 2 July 13 July 24
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