It’s been a bad day so far for the motor industry, with the VW emissions scandal rumbling on and the AA (LON:AA) shifting into reverse.
The emissions scandal shows every sign of turning into VW’s version of the banking sector’s payment protection insurance farrago, with the German car maker setting aside €6.5bn to deal with the fall-out from the test fiddling, as it pledged to recall 11mln vehicles worldwide.
Volkswagen shares have taken a bashing, but its German peers BMW and Daimler have also seen their shares marked sharply lower, just in case …
Meanwhile, roadside services firm the AA claims its transformation remains firmly on track, but the share price reaction to this morning’s interims would suggest the company has taken a detour down a cul-de-sac.
Revenue in the six months to end-July was down to £484.6mln from £491.7mln the year before, and what it calls “trading EBITDA” was down to £199.2mln from £211.8mln.
Good old fashioned easy to understand profit before tax was, in fact, a loss before tax, of £63.6mln, versus a profit the year before of £10.2mln.
Total cash finance costs rose to £167.8mln from £108.8mln the year before, including £102.4mln interest on external borrowings. At the end of July, borrowings and loans had been reduced to £2.91bn from £3.38bn a year earlier, which seems a lot for a company with a market capitalisation of £1.85bn but is, perhaps, not uncommon for a company dumped on the market by its private equity owners.
The shares were off 8.3% in lunchtime trading.
It is not all bad news from the car market, however, with car finance specialist S & U (LON:SUS) seeing its shares rev higher after a sparkling set of interims.
The company offloaded its doorstep lending business recently to focus on the faster-growing car finance sector, and that decision looks to have been a very shrewd one, with Advantage Finance, its car loan unit, seeing a 26% increase in profits.
We’ve done motors … time to move on to fags and booze.
British American Tobacco (LON:BATS) is to buy a Polish e-cigarette company, CHIC Group. It has also teamed up with industry rival Reynolds American to collaborate on e-cigarette vapour technology.
Pubs group Mitchells & Butlers (LON:MAB) has called time on Alastair Darby’s stint as chief executive. Darby will step down at the end of this week, trousering a year’s salary while doing so, following a profit warning from the company today.
Chief operating officer Phil Urban will take over as the new chief executive.