Bv Maurice Barnfather
British Leyland’s first half loss, predicted at the annual meeting in March by Lord Stokes, the chairman, turns out so be £16.6m, against a £22.8mn profit for the same period last year. Disclosing this yesterday, the company said that “in view of the non-recurrent circumstances” which caused the loss, BLMC is holding its interim dividend at 0.7p gross a share. However, this dividend “does not imply that any particular level of final dividend will be recommended”, Lord Stokes said.
The whole of the interim loss was due to the three-day week, with BLMC losing sales worth about £100m or 100,000 units. Unit sales fell from 561,000 to 496,000 in the six months to March. Without this loss of production due to the three day week, BLMC had expected pre-tax profits in the opening six months to improve on the same period of the previous year, Lord Stokes said yesterday.
Despite production problems, BLMC’s share of the home car market increased from 31 per cent to 35 per cent, with the value of exports from the United Kingdom higher than in any previous half year in the corporation’s history. But the total car market declined and BLMC’s sales for the six months slipped from £759m to £741m, the United Kingdom falling from £411m to £405m and overseas from £348m to £336m.
Of the total sales figure, direct exports increased from £213m to £218m. Lord Stokes did offer comfort to shareholders yesterday, apart from the maintained interim payment, when he forecast that despite the after-effects of the national emergency and the severe rate of cost inflation, “a profit should be made in the second half of the year as long as reasonable continuity of production is possible”.
Lord Stokes spoke of the “catastrophic effect of the oil crisis when for two or three months people almost stopped buying cars”.
This has led BLMC to revise downwards from 10 million to eight million cars its expectations of the total European car market this year and hence its own sales projections for Europe. BLMC has around 9 per cent of this market. As for BLMC’s financial position, there had obviously been an outflow of cash during the three-day week, but the group was well within its borrowing limits, Lord Stokes said. He repeated that BLMC would not be asking for any government money.