Dawsongroup goes into red
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• The slump in truck rental has left commercial vehicle rental and dealership outfit Dawsongroup almost 2500,000 in the red for the six months to the end of June. Chairman Peter Dawson says it is the worst ever downturn in the short-term rental market."
Dawsongroup's pre-tax losses of 2483,000 compared with a 21.7m profit for the same period last year. Although the company does not break down the figures over the divisions in its half-year results, last year short-term rental contributed about half the rental division's turnover. Rental makes up 50% of Dawsongroup's activities; a Volvo truck dealership is the other main earner.
Dawson blames the "effect of the prolonged high interest rates on the UK economy" and the "temporary oversupply" of new vehicles in the late 1980s. He says the current state of the market is worse than in the recession of the early part of the past decade. Contract hire has also suffered, but the effects of the slump have been offset by the continuation of long-term contracts. Sales in the Volvo dealership are also down 'significantly", but aftermarket busi ness has increased by 18%. Dawsongroup, which formed its rental division in 1974, has a fleet of 3,000 trucks and trailers.
Dawson says the market could pick up later this year as seasonal demand increases, but he says the omens are bad for the rental industry. "There has been an increase in firms going out of business or into receivership," he says. Shares at the Milton Keynes-based firm dropped 10 to 26p after the results were announced.