Reg Vardy PLC financial analysis Essay Example | Topics and Well Written Essays - 2000 words

Reg Vardy PLC financial analysis - Essay Example The company, which is named after founder Reg Vardy, is one of the leading motor retail groups in the United Kingdom. Reg Vardy was initially established as a haulage business at Houghton-le-Spring. Due to the success of the business, it diversified into the sale of vehicles (Yahoo! Finance 2005). Under the leadership of the founder's successor, Chief Executive Officer Sir Peter Vardy, the firm acquired franchises from a number of the finest motor and car manufacturers in the world. Through the course of the company history, Reg Vardy was appointed as the sole distributor of Aston Martin for the North of England. This was followed by the company's franchise of Ferrari and Rolls Royce. Reg Vardy was also awarded the main dealer franchise for other marques such as Jaguar/Daimler, Mercedes and BMW among others. (Company History 2005) In 1989, Reg Vardy became listed in the London Stock Exchange. The initial flotation has raised about 5 million and allowed for expansion outside North East Heathen. With this, the company expanded further as it acquired more dealerships from other volume marques. (Company History 2005) To finance its expansion binge, the company issued rights in 1998 and raised 26 million. The fund was used to acquire Trust Motor Group, the firm's largest acquisition to date. In the same period, the company also established Vardy Contract Motoring, which is focused on the contract hiring and leasing operations (Company History 2005). This year, Reg Vardy pushes through with its strategic acquisitions given the upcoming purchase of five dealerships from the Priory Motor Group. This highlights the company's strategy of acquiring performing and high quality business that accounts from payments of goodwill. (Reg Vardy PLC Annual Report 2005) So far, Reg Vardy sells about 200,000 vehicles annually and employs around 6,000 workers. It has also substantially increased its total franchises to 98 dealerships in 2005 from only 63 dealerships in 1998 (Reg Vardy PLC Annual Report 2005). The company continues to distribute new and used cars for Aston Martin, Renault, Alfa Romeo, Audi, BMW, Citroen, Fiat, Mercedes and Jaguar. Its major shareholders include the Vardy family (28%), Deutche Bank (20.6%) and Aegon (3.59%). (Yahoo! Finance 2005) Financial Highlights Table 1 - Balance Sheet Balance Sheet (in millions) 2005 2004 2003 2002 2001 Assets Current Assets Cash and Equivalents 39.2 24.3 45.5 39.7 12.0 Receivables 73.6 66.6 61.9 52.6 64.0 Inventories 243.2 247.5 174.8 123.1 128.2 Other Current Assets 14.5 12.0 15.0 6.5 8.5 Total Current Assets 370.5 350.4 297.2 221.9 212.7 Property Plant and Equipment-Net 180.9 181.7 154.8 162.0 165.6 Intangible Other Assets 3.5 3.2 1.3 1.3 1.8 Other Assets 3.5 3.2 1.3 1.3 1.9 Total Assets 555.0 535.3 453.3 385.2 380.3 Liabilities and Shareholders' Equity Current Liabilities Accounts Payable 186.2 184.3 146.9 96.5 78.8 Short-Term Debt 34.1 38.7 70.1 42.3 35.7 Other Current Liabilities 44.4 37.0 28.8 25.6 47.3 Total Current Liabilities 277.2 271.3 256.8 174.5 169.3 Long-Term Debt 47.9 49.7 12.7 53.0 57.1 Provision for Risks/Charges 5.4 1.2 1.4 2.8 4.0 Deferred Taxes 6.4 5.9 5.1 4.1 4.8 Other Liabilities 12.6 10.8 6.3 1.7 12.4 Total