ferret's stock to watch: a.p eagers limited

Ferret's Stock to Watch: A.P EAGERS LIMITED
07:35, Monday, 16 May 2005

Sydney - Monday - May 16:(RWE Australian Business News)
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OVERVIEW
********

A.P Eagers (APE) is well placed to take advantage of Queensland
auto buyers with the right franchises and locations.

It claims to be Australia's largest listed automotive retail
group, dominating the Brisbane metropolitan area.

AP Eagers operates four key divisions - new vehicles, used
vehicles, parts and servicing.

The company's managing director Mr K W Macdonald told the annual
meeting on Friday that unaudited trading results for the first quarter
saw group turnover increase by 13.5% to $248 million compared with the
first quarter in 2004 while group profit before tax was up 12.3% to $4.4
million.

The acquisition of Bridge Toyota was settled on 6 May 2005 and
was expected to have a positive impact on dealership operating profit
this year, he said.

Mr Macdonald said that current data suggested that the
Australian automotive industry would see another record year to better
last year's volume of 955,229 units.

The chairman, Mr B W Macdonald, said there was an ongoing demand
for funds to acquire, develop and rationalise new businesses.

"More recently the Group has been able to fund much of this
growth through strong cash flow, a well supported dividend reinvestment
plan and bank borrowings without the need to raise further equity,
however, the Board is currently reviewing a form of capital raising in
which our loyal shareholders can participate and continue to take an
active role in the future development of the Group.

"We will provide shareholders with more detailed information in
this regard in the coming months," he promised.

SHARE PRICE MOVEMENTS
*********************

Shares of Eagers fell 24c to $7.26 on Friday. Rolling high for
the year has been $8 and low $6.60. Dividend is 36c a share to yield
4.96 per cent.

The chairman also told shareholders at the meeting that the
buoyant motor vehicle industry during 2004 and benefits flowing from the
group's ongoing rationalisation and expansion program assisted the
company in producing yet another record profit result.

On turnover of $911 million the net profit before tax of $17.23
million was up 13.2% on 2003, enabling the payment of an annual fully
franked dividend of 36 cents per share, an increase
of 3 cents per share or 9.1% over 2003.

The final dividend of 19c a share is being paid today.

Shareholders were told that to maintain its industry position
Eagers needed to have dealerships located on strategically visible and
functional properties.

Board has actively sought and acquired over the past two years a
number of such properties that will enable the group to attract
additional franchised operations and provide opportunities for future
rationalisation and efficiency gains.

Eagers is particularly interested in properties bounded by
Breakfast Creek Road, Durong, Ross and Edmond Streets at Newstead with a
combined area of 19,356 square metres.

This site was acquired in two stages, the second stage coming
with the acquisition of the City Automotive Group business that was
approved by shareholders at the last annual general meeting.

The property was purchased from major shareholder, WFM Motors
Pty Ltd, and has been extremely successful with current performance
exceeding initial expectations.

The chairman emphasised that the development of the site is
particularly important to the group.

"It is a very strategically positioned and valuable property
that will be developed through a joint venture partnership.

"The development will probably include both commercial and
high rise residential elements incorporating our existing motor vehicle
franchised operations of Subaru, Peugeot and Mitsubishi fronting
Breakfast Creek Road.

"A further exciting development is planned at Mango Hill
Northlakes where we are committed to the acquisition of land for the
imminent construction of new facilities for Torque Toyota, Mr Macdonald
disclosed.

BACKGROUND
**********

A.P. Eagers Limited has its origins in the formation of E.G.
Eager & Son Pty Ltd, a family automotive company established in Brisbane
in 1913 by Edward Eager and his son Frederick.

After establishing the State's first motor car assembly plant,
Eagers became the distributor of General Motor's products in Queensland
and Northern New South Wales and listed as a public company in April
1957.

A merger in November 1992 with A.P. Group Ltd which owned a
number of new vehicle franchises, saw the name change to A.P. Eagers
Limited.

Since that time further motor vehicle franchises have been added
and growth has continued.

A.P. Eagers is currently Australia's largest listed automotive
retail group, ranked by turnover and market capitalisation. At December
2002, the group employed 1,031 people, had 1,512 shareholders and sales
revenue of $750million.

Operating predominantly in the Brisbane Metropolitan area the
company's focus is on its core business of owning and operating motor
vehicle dealerships which provide full facilities covering new motor
vehicle sales, used motor vehicle sales, service, spare parts and the
provision of allied consumer finance.

These services are provided through some of Brisbane's best
known dealerships as listed here.

ENDS

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I don't hold APE