Sheilds Automotive, the Scottish car dealership, is confident it can soon move back into profit following a restructuring which followed the collapse of MG Rover in 2005.
The company, which operates from large sites at Darnley, in Glasgow, and Hamilton, cut its underlying losses last year and added franchises in the early months of 2007. Shields was hit hard when MG Rover collapsed in April 2005. As part of a subsequent restructuring, the company closed a dealership at Inverclyde and sold premises at St Andrews Road in Glasgow. The sale allowed the company to review and restructure its bank borrowings, including the partial repayment of a loan.
Managing director Joe O'Donnell, and fellow directors Elspeth Macnaughton and Stewart McLaren, created Shields through a management buy-in of loss-making Lex Rover in Glasgow in 1994. Last year the company's new franchises included Mazda, Peugeot, Land Rover and Toyota. Shields also sells used cars.
So far in 2007 the company has added the Mitsubishi franchise and an additional Mazda franchise in Hamilton.
In the year to June 30, 2006, Shields cut its operating losses to £337,000 from £907,000 the previous year. Sales declined from £66.1m in 2005 to £63m.
Writing in the annual report, the company's board said it has spent £10m on dealership facilities over the last eight years but building profitable outlets in new locations has been slower than anticipated. It added: "The closure of the company's original successful business as a result of the demise of Rover has contributed to the significant changes in the location and maturity of the business.
"During the year under review, a significant reduction in the business operating loss was achieved It is the directors' objective to return the company to profitability and strong progress has continued towards the achievement of this in the current financial year."
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