LONDON - Luxury car dealer H.R.Owen said it expected to return to profitability in 2010 and predicted better trading conditions, lifting its shares more than 6 percent on Wednesday.
The British company, which sells brands such as Bugatti, Ferrari, Porsche and Rolls Royce, said it had taken action to reduce costs and boost used car sales in the second half to combat the considerable challenges faced by the UK car market.
The company also predicted that January's reversal of last year's cut in value added tax would have brought forward a number of new car sales into the traditionally quiet December period.
H.R. Owen said it expected underlying operating losses in the second-half of the year to be significantly reduced from those in the first-half when the lack of available credit at affordable rates had hit car sales.
In the first half, the company made a pretax loss before exceptional items of 1 million pounds ($1.6 million), compared with a profit of 1.7 million the year before.
Shares in H.R.Owen were trading at 56.5 pence, up 6.6 percent at 1415 GMT.
The company said Britain's car scrappage scheme had been generally positive but had had little impact on the luxury end of the market.
The government launched a scheme earlier this year that offers drivers 2,000 pounds to trade in cars more than 10 years old against a more fuel-efficient newer model.
The scheme has proved popular, and new car sales in Britain leapt by 57.6 percent in November, their biggest rise this year.
H.R. Owen said it expected to pay shareholders a final dividend for the year to Dec. 31.
Although the trading environment is still uncertain, the board's expectation remains that trading conditions in 2010 will improve, with the group returning to profitability at the operating level, the company said in a trading statement.
(Reporting by Matt Scuffham; Editing by Paul Hoskins) ($1=.6289 Pound)