Rover dealer Vardy: Shares drop 3%

Shares in car dealer Reg Vardy today fell nearly 3% after it said it was likely to take a hit from the collapse of MG Rover.

Vardy’s stock fell 14.5p to 492p after it said it may have to make a one-off charge to its 2004/5 accounts as a result of the administration of the Longbridge car manufacturer.

It said Rover owed it £600,000 (E880,000) and that it may need to make further exceptional provisions to cover the valuation of new and used cars made by Rover and warranty obligations that the manufacturer may not now fund.

Vardy, which runs three Rover dealerships, said the full financial impact of the items was likely to be clear by the time of its year end results.

It said it would include any charges required in the current year’s financial statements.

The group’s Rover dealerships account for annual sales of around £25m (E36.7m), or less than 2% of its turnover.

Vardy said it planned to refranchise the dealerships concerned in the event that their franchises did not continue and that it did not foresee any impact to its trading results in the next financial year.

Chief executive Sir Peter Vardy said: “Given the current uncertainty, it is clear that as dealers, we are not going to be immune from the impact of MG Rover’s situation.

“However, as a Rover dealer since 1982, we sincerely hope that a positive route forward can be found for the business and that Reg Vardy can continue to support UK car manufacturing.”